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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
GERMANY
Employment barometers in the IFO survey have weakened in recent months, with the July manufacturing print of -6.2 a 30-month low, and services at 5.4 a 27-month-low (albeit still in expansionary territory).
- However, nominal wages - which tend to track the employment barometer reasonably well (see chart) - have not followed suit and have pushed higher.
- This divergence can be seen in both manufacturing and service sectors, though the latter is the primary concern given the persistent above-zero prints in the IFO survey.
- In the ECB July meeting press conference, President Lagarde noted that the Governing Council was not yet worried about wage-price spiral dynamics in the Euro area.
- However, with real wages stuck in negative territory for almost 2-years (a Eurozone-wide phenomenon), the risk of second-round effects on inflation resulting from successful wage bargaining in coming months remains.
- The next round of German labour earnings data for Q2 is due 29 August, which will shed more light on whether wage growth follows the employment barometers and cools off, or if the divergence seen this year is set to continue.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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