EUROZONE DATA: Compensation Per Employee Accelerates Above ECB Forecasts In Q1
Jun-07 09:23
Eurozone Q1 compensation per employee was 5.1% Y/Y, above Q4's 4.7% and the ECB's forecast of 5.0%.
- The 5.0% Y/Y compensation per employee forecast noted above is taken from the latest Eurosystem projections here.
- In yesterday's press conference, Lagarde noted that "If you look at compensation per employee based on what we can calculate on the basis of 15 countries, it was 4.7%."
- The 5.0% Y/Y figure is from Eurosystem (i.e National Central Bank) forecasts, while Lagarde likely quoted forecasts made by ECB staff. This may explain some portion of the discrepancy. There may also have been different cut-off dates/data used to compute the two forecasts.
- Additionally, Lagarde was asked about whether the ECB would only make decisions in forecast meetings (so this bit isn't explicitly on wages), but she said: "Regarding your first question, first of all, those are not our projections. Those are the projections of staff. And it’s obvious that projections produced by staff on a regular basis are very informative, go deep into the data that we receive, analyse at length, produce scenarios, analysis, sensitivity analysis, and that this is very helpful for us to make decisions. "
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
JPY: Extending broader lows
May-08 09:19
- Continued broader lows for the Yen, against the EUR, USD, GBP, AUD still lags.
- As already mentioned during the EU Cash Govie open, USDJPY next resistance is further out, up to 156.28 High May 2, while a test all way up to ~157.50 would consolidate the last intervention triggered on the 1st May.
FOREX: USD/JPY Extends Bounce Off Post-Intervention Support
May-08 09:18
- USD/JPY continues to grind higher, with the pair touching a new post-intervention recovery high in the European morning, extending the bounce off the 50-dma support that crosses today at 152.17. The moves put the JPY spot trade-weighted Index at around 3% off the pre-intervention lows, but tolerance of the authorities should get tested well ahead of reaching that mark.
- With Japan having already spent already spent ~$60bln in reserves in this year's intervention phase, markets speculate on what other steps the BoJ could take to shore up the currency - with further rate hikes likely to remain part of the conversation across this week's real cash earnings data and National CPI on the 24th May.
- The USD Index is firmer, with the greenback outperforming most others. The Riksbank decision saw Sweden join Switzerland in being one of the first European countries to kick off their easing cycle. EUR/SEK was higher in response, but outsized price action was broadly contained. Material currency weakness was avoided as the bank stressed that a follow-up rate cut in June was unlikely, leaving the rate path guidance in March intact.
- Data remains few and far between Wednesday, with just March final wholesale trade sales and inventories data due. The speaker schedule is busier, as ECB's Wunsch & de Cos and Fed's Jefferson, Cook and Collins make appearances.
GILT AUCTION RESULTS: Relatively soft 30-year green gilt auction
May-08 09:09
- A relatively soft 30-year green gilt auction with a tail of 0.6bp, but more importantly the lowest accepted price of 50.953 was below the prevailing secondary market price going into the end of the auction (although there was a dip just below this price a couple of minutes before the end of the auction period and in line with other gilts the price of the 1.50% Jul-53 green gilt has been moving slightly higher since around 8:40BST).
- Some minor weakness in the price after the auction results were published but we wouldn't really read into this too much for the wider gilt market with no impact on gilt futures.
