All quiet on tariff talks, but UK surprises with soft jobs data
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Why is London in focus and how are US‑China trade talks influencing markets?
Well, London has grabbed a bit of the focus overnight. First, because of nothing really out of the trade talks between the US and China, but there's hope. But their own UK jobs data came in particularly soft, but there is the question about how reliable that data is, of course. Uh we'll pull that apart a bit today. Plus the World Bank's latest forecasts uh also down. Also, oil price forecasts from the EIA down as well. And the NAB Business Survey from yesterday and And US inflation coming up as well. How could you not listen when we've got all that on the show? It's Wednesdays, the 11th of June 2025. It's the morning call from NAB. Good morning. Well US equities have climbed a little higher, climbing more towards the close actually.
Tesla helped because it's up six percent this session at the close. Uh so the uh Dow is up naught point three percent, uh around naught point six percent for both the S P and the Nasdaq. In Europe, the Eurostocks fifty is down naught point one percent, the DAC's down naught point eight percent, but a quarter percent rise in the FTSE one hundred, uh a small move up in the The US dollar, a similar small move in the Aussie dollar, which is just uh a little over sixty-five point two US cents now. The euro is looking flat, but a quarter percent fall in the yen and a 0.4% drop in the pound. So the UK again the outlier there, and that applies to bond yields as well. Hardly anything for 10-year treasuries, uh down one basis point really, but 10-year guilt yields are down nine basis points.
Today, with falls of four or five basis points across much of the rest of Europe. Meanwhile, oil is lower, a naught point eight percent drop in WTI and a naught point six percent drop for Brent, which is around sixty-six point six US dollars right now. So, why those moves for the UK? Let's start on that with Rodrigo Cotrill at NAB in Sydney.
How reliable is the UK jobs data and what does it mean for bond yields?
So it looks like uh it's the employment data what done it uh Rodrigo, because they weren't that good. And I guess that explains why bond yields are down so far. So it's always difficult to know how to measure UK employment because the official numbers aren't very good uh generally, not particularly reliable. So then people start to look at figures from the tax office, from the p the PAYE measure, uh which showed a decrease of naught point one percent for the month in May and an increase of just naught point eight percent over the year. Uh but then there could be a lot of people self employed. employed and those self employed people don't provide that data uh until they have to at the end of the year.
So a one month measure on that is uh is is a bit useless really. So what do we make out of all of this?
Um morning Phil. And just to add a little bit more to the complication, there there's some that are suggesting that um more people have gone on to kind of a self employed uh reporting as well. So it it kind of potentially lowers the number two. Um so and and as you know there's there's also issues with the survey data, which is not uh as big uh in terms of sample or responses. Um so then it also makes it a bit difficult to to assess. But I suppose when you look at the whole thing, um and then when you look at where we've been in in in recent months, I think the overall takeaway and hence the reaction that we've seen in terms of a a significant decline in yields, uh particularly the ten year down around nine basis points, is that the data is telling you the labour market is weakening.
Um even though to your point Well I
mean there's other clues, aren't there? So claimant counts is the big one. Yep. Uh and that is up quite a bit for the month and it's up six point six percent in the yeah, I think one point nine percent of just for the month. Uh and so you can't argue with that one, I guess.
Yeah, you can argue. I mean, one of the sort of interesting things as well of the about the labour market in the UK is that whilst you have seen this weakening, um, the decline in terms of earnings, um, it hasn't been sort of pronounced or anything.
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Chapters
8 chapters
1
Why is London in focus and how are US‑China trade talks influencing markets?
0:01–1:46
2
How reliable is the UK jobs data and what does it mean for bond yields?
1:46–3:52
3
What does the surge in UK claimant counts indicate about the labour market?
3:52–5:42
4
Which European economies showed strength in April industrial production and why?
5:42–7:50
5
How are tariff negotiations affecting global oil price forecasts?
7:50–10:02
6
Why did the World Bank cut its global growth forecast and what role do tariffs play?
10:02–12:17
7
What does the latest NAB business survey reveal about Australian business conditions?
12:17–14:22
8
How will today’s US CPI data impact Fed rate‑cut expectations?
14:22–15:34