In today’s briefing:
- CX Daily: The Disarray in China’s Vocational Training System
- South African Bonds Switch from Outperformers to Underperformers
- Asian Monetary Policy: Growing Impetus For Graduated Rate Hikes In 2H22
- UK: Strain Shows as Labour Cycle Turns
CX Daily: The Disarray in China’s Vocational Training System
Cover Story: The disarray in China’s vocational training system
China will go to war if ‘anyone dares’ aid Taiwan independence, defense minister warns
North China city launches flash campaign to curb gang violence amid national outcry
South African Bonds Switch from Outperformers to Underperformers
- With US rates reaching the highest levels in a decade, it is not a surprise that the volatility is spilling over to emerging markets.
- While South African local bonds had weathered the volatility in 2021 well, this time around, they have gone from outperforming against the rest of EM to underperforming.
- Besides external drivers, domestic factors have turned negative as well – particularly rising inflation and worsening debt profile – indicating that rates in South Africa should continue to underperform.
Asian Monetary Policy: Growing Impetus For Graduated Rate Hikes In 2H22
- With major central banks ramping up rate hikes, slow action by emerging Asian central banks could produce financial stresses.
- Asian central banks have started raising rates and will step up the pace in 2H22.
- A key caveat, is that Asian policy tightening can be less aggressive than in the US since most countries still have slack in their economies except South Korea & Singapore.
UK: Strain Shows as Labour Cycle Turns
- A shock spike in the UK unemployment rate broke its resilient trend. Less depressed labour force levels matter less than data about price-relevant gaps, like the UR.
- The UR rise appears to be a genuine shift, despite the high demand for workers helping to drive higher wages. The wage trend appears comfortably above 4%.
- The peak cyclical pressure in the UK labour market may have passed, with the UR trend turning and wage growth not rising as much. A burn-out phase may be starting.
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