FOMC Minutes Signal Willingness Liftoff

Daily Analysis - 19/05/2016

April Minutes Show June Hike was Likely, Reliant on Data


Federal Reserve policy makers said that another hike to the Fed funds rate was appropriate for June if the economy continued to improve, despite disagreements on whether those conditions would be met on time. The labour market and inflation expectations were cited as some of the conditions that could determine the eventual date

Australian Unemployment Unchanged in April

Unemployment in Australia was unchanged at 5.70% in April, data from the Australia Bureau of Statistics showed. The number of people employed increased by 10,800, a slightly slower pace compared to last month's 12,000 rise. The participation rate fell slightly to a seasonally adjusted basis of 64.80% in April compared to 64.90% in March. Earlier this week the quarterly wage price index in Australia increased a modest 0.40%, less than the previous month's 0.50% increase.


Japan Q1 GDP Rises 0.40%

The 0.40% quarterly gains beat expectations of a 0.10% increase. The previous quarter's GDP was revised lower from -0.30% declines to -0.40%. On a yearly basis, Japan's annualized GDP growth rate was recorded at 1.70% beating a conservative forecast of 0.30%. Driving GDP higher was a 0.50% quarter-over-quarter increase in private consumption which was better than the 0.20% estimates and follows the previous quarter's -0.80% declines. Business spending fell -1.40% on the quarter against expectations of a -0.80% decline and accelerated the declines of -1.20% from the previous quarter.


UK Unemployment Rate Holds at 5.10%

Data from the UK's Office for National Statistics released yesterday showed that the unemployment rate held steady at 5.10% since December. In the three months to March, the number of people working rose by 44,000 to 31.60 million, compared to the previous three months. Both full-time, part-time and self-employed work saw gains. However, the BoE is likely to stand by on the latest labor market report as the central bank noted that it would wait for faster pace of wage growth.


Eurozone Slips Back into Deflation

Consumer price indices in the Euro Area fell into deflation in April, data from European statistics agency Eurostat showed on Wednesday. Headline CPI fell -0.20% on an annualized basis as was widely expected by economists and was lower than March's flat reading. On a monthly basis, CPI was zero percent, down from 1.20% growth a month before. The core CPI which excludes the volatile food and energy components increased 0.70% on a year over year basis, matching estimates and rising at the same pace as in March.


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