Unemployment data released for the Euro Area yesterday showed a continuous improvement of the job market with a new record low at 6.8% in March 2022 (see chart), compared to 6.9% in February 2022. This could provide further upward pressure on wages on the back of another surge in Euro zone producer prices in March 2022 (+5.3% month-on-month for a 36.8% year-on-year jump, slightly above market consensus) with soaring energy prices as well as lingering supply chains disruptions remaining the main drivers.
On the agenda today, the main event will be of course the widely expected decision of the US Fed regarding another interest rate hike. A 50 basis points increase remains the most likely scenario to combat the hottest inflation in the latest four decades. Watch out for a potential move in the EURUSD rate which still sits at a five-year low this morning around the 1.05 mark. Retail sales and services PMI data for April in Europe will be released this morning as well.
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