German IFO and Euro area wage growth amongst market movers today – Danske Bank

Analysts at Danske Bank, point out that in the euro area, the wage growth figures for Q3 are due for release today in addition to the German IFO and are going to be the market movers for today’s session.

Key Quotes

“Wages have been increasing steadily since Q3 16, reaching 1.8% y/y in Q2 17. Although wage growth has increased, it is still well below the pre-crisis average (from 1996 to 2008) of around 2.4% y/y. We do not expect wage growth to catch up to the pre-crisis average in the near future, as inflation expectations and negotiated wages (especially in Germany) do not show an upward trend. We expect wage growth to remain around 1.8% y/y in H2 17.”

“The German Ifo expectations are also released today. Ifo expectations have been on the rise since we entered 2016 and this measure of German business sentiment might not have reached its peak yet, although ZEW expectations dropped to 17.4 in December.”