In this briefing:
- UK: Labour Market Enduring Political Earthquake
- Understanding Chinese Monetary Policy: Trying Hard to Ease?
- 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.
- 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