EUROZONE DATA: Q1 Negotiated Wages Seen Around 2.5-2.7% Y/Y On Friday
May-19 10:51
Although Thursday's May flash PMIs headline this week's Eurozone data calendar, there will also be interest in the ECB’s Q1 negotiated wages print on Friday. There isn’t a solid consensus for the data, but the ECB’s forward looking wage tracker alongside some sell-side estimates we have seen suggest a reading around 2.5-2.7% Y/Y. This should be viewed as consistent with existing ECB projections, and have limited impact on rate cut pricing.
- Q4 ‘24 negotiated wages were 4.13% Y/Y, down from 5.43% in Q3. This indicator can be volatile quarter-to-quarter, as it includes one-off payments in wage agreements.
- The ECB’s forward looking wage tracker, which is publicly released the Wednesday after each monetary policy decision, currently tracks wages with unsmoothed one-off payments at 2.51% Y/Y.
- The smoother ex-one-off payments tracker is currently at 4.43% Y/Y for Q1.
- The March Eurozone Indeed wage tracker was 2.67% Y/Y (vs 2.86% in February).
- The ECB projects Q1 compensation per employee growth at 3.8% Y/Y (vs 4.09% in Q4). This data will be released on June 6 alongside the final Q1 national accounts, the day after the ECB’s June decision.
- Summarising a few recent sell side views on negotiated wage growth:
- Morgan Stanley: “In January and February, euro area negotiated wages were running around 3.1%Y. As per preliminary data from Destatis, the year-on-year growth rate of German negotiated wages in March could be very low, maybe even negative, because of base effects from very large one-off payments in the same month last year (mostly in the public sector). If confirmed (we will have German March data from Bundesbank on Thursday), this would push down the quarterly reading for the euro area to, we think, 2.7%Y in 1Q25”.
- Nomura: “We forecast euro area negotiated wage growth to slow to 2.6% y-o-y in Q1 2025”…”Our euro area aggregate forecast is based on 65% of country-level data that are already available and our expectations for the remaining data. The main elements not yet published are German data for March 2025 and French data for the entirety of Q1 2025”.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-18 05:18
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
Apr-18 05:16
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
CHINA: Bond Futures Marginally Up Despite Liquidity Injection.
Apr-18 04:02
- China’s bond market reacted very little to a second day of sizeable liquidity injection.
- China’s 10YR bond future is up just +0.03 at 109.04 and remains firmly above all major moving averages. The nearest being the 20-day EMA at 108.61.
- The 2YR bond future is down -0.02 at 102.46; remaining below all major moving averages – the nearest being the 20 day EMA at 102.52.
- The 10YR CGB is marginally lower in yield at 1.64%
