Macroeconomics: The Day Ahead for 11 June

  • Light day for statistics has UK labour report to digest ahead of US NFIB Small Business Optimism and Brazil IBGE IPCA inflation, rash of ECB speakers and OPEC and EIA monthly oil market reports
  • UK: stubbornly high wage growth maintains pressure on Services inflation, labour demand indicators very mixed, not a game changer in either direction for MPC
  • Energy: monthly oil market reports focus on large divergence between optimistic OPEC demand forecast, and modest EIA estimate


Outside of digesting the UK labour market indicators, today’s statistical schedule looks rather sparse with only the US NFIB Small Business Optimism (seen little changed, despite some improvement in the already published employment indices) and Brazil’s IBGE IPCA Inflation likely to garner any attention. There is a busy run of ECB speakers, while both OPEC and the US EIA publish their monthly Oil Market Reports.  As noted in the week ahead, of particular interest will be whether OPEC makes any changes to its oil demand growth estimate of 2.25 Mln bbls for 2024, which stands in sharp contrast to both the EIA estimate of just 960K and IEA of 1.06 Mln, the former having been cut sharply from January’s 1.39 Mln, above all in April. In all likelihood given last week’s production cut tapering decision, OPEC should stick to its forecast. 10-yr maturity debt is the flavour of the day in terms of govt bond sales, with auctions in the Netherlands and US, and a syndicated sale in the UK. Lagarde’s comments about there potentially being a number of meetings in between rate cuts will keep pressure on Eurozone bond yields, above and beyond the additional political risk premium on the back of the French election uncertainty.

** U.K. – April/May labour market data **

– UK labour data were once again mixed, and continued to be marred by hefty revisions that advise strongly against over-interpretation. Wage growth remains very robust with headline higher than expected at 5.9% (due to revision), while basic pay was unchanged at 6.0% y/y, but as previously noted, wages are the most lagging element of the report, even if continued strength would suggest continued pressure on Services CPI. Labour demand indicators were mixed, with a smaller than expected fall in HMRC Payrolls at -3K, and April revised up to -36K, but a hefty 50.4K jump in the Claimant Count and a larger than expected fall in the less timely LFS Employment of -136K, while Vacancies were little changed at 904K, still well above the pre-pandemic peak. On balance it does nothing to change the rate outlook, with the MPC perhaps relieved that the election timing precludes any policy changes at this meeting and gives it more time to assess incoming data.

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