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



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.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Oil Posts 2% Gain for the Week Despite India Virus Surge



Crude Oil - Investors King

Oil prices steadied on Friday and were set for a weekly gain against the backdrop of optimism over a global economic recovery, though the COVID-19 crisis in India capped prices.

Brent crude futures settled 0.28% higher at $68.28 per barrel and U.S. West Texas Intermediate (WTI) crude advanced 0.29% to $64.90 per barrel.

Both Brent and WTI are on track for second consecutive weekly gains as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.

In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December.

In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers.

The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer.

“Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM.

The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.

“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.

“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”

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Lagos Commodities and Futures Exchange to Commence Gold Trading



gold bars

With the admission of Dukia Gold’s diversified financial instruments backed by gold as the underlying asset, Lagos Commodities and Futures Exchange is set to commence gold trading.

According to Dukia Gold, the instruments will be in form of exchange-traded notes, commercial papers and other gold-backed securities, adding that it will enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the Nigerian government to better diversify foreign reserves and create jobs across the metal production value chain.

Tunde Fagbemi, the Chairman, Dukia Gold, disclosed this while addressing journalists at Pre-Listing Media Interactive Session in Lagos on Thursday.

He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us facilitate our infrastructure development, expand capacity and create fungible products.

“This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.”

“As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located,” he added.

Mr Olusegun Akanji, the Divisional Head, Strategy and Business Solutions, Heritage Bank, said the lender had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard.

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Crude Oil

Oil Nears $70 as Easing Western Lockdowns Boost Summer Demand Outlook



Crude oil

Oil prices rose for a third day on Wednesday as easing of lockdowns in the United States and parts of Europe heralded a boost in fuel demand in summer season and offset concerns about the rise of COVID-19 infections in India and Japan.

Brent crude rose 93 cents, or 1.4%, to $69.81 a barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude rose 85 cents, or 1.3%, to $66.54 a barrel.

Both contracts hit the highest level since mid-March in intra-day trade.

“A return to $70 oil is edging closer to becoming reality,” said Stephen Brennock of oil broker PVM.

“The jump in oil prices came amid expectations of strong demand as western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high,” he said.

Crude prices were also supported by a large fall in U.S. inventories.

The American Petroleum Institute (API) industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.

Traders are awaiting data from the U.S. Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large fall.

“If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January,” Commonwealth Bank analyst Vivek Dhar said in a note.

The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe.

Euro zone business activity accelerated last month as the bloc’s dominant services industry shrugged off renewed lockdowns and returned to growth.

“The partial lifting of mobility restrictions, the expectation that tourism will return in the near future, and the lure of the psychologically important $70 mark are all likely to have contributed to the price rise,” Commerzbank analyst Eugen Weinberg said.

This has offset a drop in fuel demand in India, the world’s third-largest oil consumer, which is battling a surge in COVID-19 infections.

“However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment,” ING Economics analysts said of the situation in India.

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