The U.S. labor market will take about a year and a half to return to full steam after the economic blow from the Covid-19 pandemic, according to Fitch Ratings. Federal stimulus and a gradual reopening of service industries that were hit hardest will help boost demand for workers, Fitch said in a report released Wednesday. Still, analysts led by Chief Economist Brian Coulton don’t expect unemployment levels to reach their natural rate, about 4.3% in Fitch’s view, until the fourth quarter of 2022. Doing so would require the creation of about 7 million jobs. The massive disruption last year will cause some “scarring” because some older workers were permanently discouraged from working, dampening the labor supply. Even so, Fitch sees persistent supply and demand imbalances in the months ahead, limiting upward pressure on wages.
"Now or never" for WTO reform, Britain to tell G7 allies
Britain will tell G7 allies that it is "now or never" for the World Trade Organization to reform and strengthen its rulebook to stop global
trade fragmenting. Britain wants to use its role as president of the G7 this year to get an agreement among the group of wealthy
nations to share more information and support the WTO to take other steps to punish industrial subsidies and other unfair practices.
Trade minister Liz Truss has previously heavily criticised China's use of subsidies, and will repeat calls for the WTO to make good
on promises to modernise its rulebook. China, a WTO member since 2001, denies criticism from Britain that it steals intellectual
property, unfairly hurts the environment and exports goods made with forced labour. Other G7 allies, including U.S. President Joe
Biden, agree on the need to reform the WTO and address China's rising global influence.
China's industrial profits growth slows in April amid high commodity prices
Earnings at China's industrial firms grew at a slower pace in April, with high commodity prices and weaker performance in the
consumer goods sector limiting overall profitability from manufacturing. Profits at China's industrial firms rose 57% year-on-year in
April to 768.63 billion yuan ($120.22 billion), down from 92.3% in March, data from NBS showed. For the January-April period,
industrial firms' profits grew 106% from the same period a year earlier to 2.59 trillion yuan. However, The improvement of corporate
performance is still uneven as the profitability of some consumer goods industries has not yet recovered to pre-epidemic levels
coupled with the high prices of bulk commodities. This has increased the pressure on the production and operation of midstream and
downstream industries.
Dollar firms as traders brace for U.S. inflation gauge
The 10-year government bond yield (interpolated) on the previous trading day was 1.83, -2.00 bps. The benchmark government
bond yield (LB31DA, 10.5 years) was 1.81, -1.50 bps. LB31DA could be between 1.80-1.84. Meantime, the latest closed US 10-year
bond yields was 1.58%, +2.00bps. USDTHB on the previous trading day closed around 31.36 Moving in a range from 31.25-31.34
this morning. USDTHB could be closed between 31.25-31.32 today. Meantime, The dollar found support on Thursday from emerging
views the Federal Reserve is slowly but surely edging towards a discussion about tightening monetary policy, and as traders await
crucial U.S. inflation data this week.
Sources : Bloomberg, CNBC, Investing, CEIC
