Heads up: Key wages data in the Eurozone will be coming up later

The Q4 numbers showed that wages were growing at a pace that is less worrisome towards the end of last year, as seen below:

The reading then was 4.5% year-on-year (or 4.49% to be exact) and that is a drop from the 4.7% year-on-year reading in Q4 2023.

It is estimated that wages growth will have eased further in Q1 this year. But there is a risk after the Bundesbank indicated that negotiated wages in Germany had risen by 6.2% year-on-year, being much higher than expected.

For some context, the ECB had previously highlighted this key data point as being a supposed “pre-requisite” for cutting rates in June.

But after having seen their communique over the last few weeks, they are confident enough to act regardless. But this will be a major data point to be mindful of as the ECB looks to tee up further moves beyond June.

The release for the Q1 figures should come at around 0900 GMT.

This article was written by Justin Low at www.forexlive.com.