Brief Macro: UK: Labour Market Enduring Political Earthquake and more

In this briefing:

  1. UK: Labour Market Enduring Political Earthquake
  2. Understanding Chinese Monetary Policy: Trying Hard to Ease?

1. UK: Labour Market Enduring Political Earthquake

2019 09 10%20lab4

  • Headline labour market data were broadly robust in Jul-19 as further upward revisions to wages were joined by a return to the unemployment rate’s 3.8% low.
  • The recovery in GDP growth has not stoked employment, which has been steady at a subdued rate amid a normalising labour force level. Falling vacancies still show the risk of a rapid adverse adjustment if there is a no-deal Brexit, as I assume.

2. Understanding Chinese Monetary Policy: Trying Hard to Ease?

Smartkama

  • Latest RRR cuts are only tactical and do NOT signal strategic monetary ease
  • PBoC liquidity injections are the key monetary signal
  • Liquidity jumped from May through July but August flat and September weak
  • No indication yet that PBoC easing aggressively….but they will

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