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Aussie Job-Market Slack Deepens as Participation at 10-Year Low

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Aussie Job-Market
  • Aussie Job-Market Slack Deepens as Participation at 10-Year Low

Australia’s labor-market slack deepened in October as the participation rate slumped to the weakest level in a decade, reinforcing a lack of inflation highlighted by record-low wage gains.

The data represent a conundrum for a central bank trying to look through weak price pressures and focus instead on the headline rates of unemployment and economic growth to justify leaving interest rates unchanged at 1.5 percent.

Key Points

  • Employment rose 9,800 from September, when it dropped a revised 29,000; economists forecast a 16,000 gain in October
  • The jobless rate held at 5.6 percent; economists forecast 5.7 percent
  • Full-time jobs jumped by 41,500, rebounding from a 74,300 plunge in September; part-time employment fell by 31,700
  • Participation rate was unchanged from a revised 64.4 percent; economists predicted 64.6 percent
  • The Australian dollar bought 74.78 U.S. cents at 12:44 p.m. in Sydney from 74.90 cents before the report

Australia’s labor market has suffered a slump in participation this year, signaling more spare capacity than improved hiring and unemployment data suggest. The central bank, meanwhile, has cited the jobless rate and solid economic growth — although largely fueled by population gains and surging resource exports — as reasons for optimism on the outlook. It’s essentially waiting to see which way the economy breaks, particularly after a rebound in commodity prices that’s injecting additional cash.

Economist Takeaways

* “The bottom-line is that there will be no change in interest rates anytime soon,” said Craig James, a senior economist at the securities unit of Commonwealth Bank of Australia. “The economy softened mid-year due to Brexit and the federal election. And recently there was caution ahead of the U.S. election.”

* “Sizeable revisions to September’s figures meant that the annual rate of employment growth fell to a two-year low of 0.9 percent year-on-year,” said Kate Hickie, an assistant economist at Capital Economics. “This will do little to allay growing concerns about the health of the labor market.”

Other Details

At a state and territory level, unemployment either held steady or fell everywhere except Western Australia, the center of the nation’s mining boom that’s been hit hard by falling resource investment. Central bank Governor Philip Lowe says the boom is now 80 percent unwound, so the drag on the state should ease.

Unemployment fell to 5.8 percent from 6.2 percent in Queensland, heartland of the nation’s coal industry that’s enjoying a price bonanza; the state is also heavily geared to tourism that’s booming amid a weaker currency.

The southeastern state of Victoria, which is recording the country’s fastest population growth, added the most jobs in October with 20,500. The state, which is recording the country’s fastest population growth, also saw the biggest gains over the past six months.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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