Eurozone Trade and Wage Growth Figures Disappoint the EUR

It was a relatively quiet morning on the Eurozone economic calendar. Key stats included wage growth and trade data for the Eurozone. The numbers were skewed to the negative, weighing on the EUR.

Eurozone Wage Growth Slows

In the fourth quarter of last year, wages grew by 1.5%, quarter-on-quarter, versus 2.2% growth in the quarter prior.

According to Eurostat,

• In the euro area, hourly labor costs increased by 1.9% compared with the same quarter of the previous year.
• The two main components of labor costs are wages & salaries and non-wage costs.
• While the cost of wages & salaries increased modestly, the non-wage growth component jumped by 3.4% in Q4.

Softer wage growth and rising consumer prices are a bad combination for consumption.

Eurozone Trade Deficit Widens

In January, the Eurozone’s trade deficit widened from €4.6bn to €27.2bn in January.

According to Eurostat,

• Exports of goods to the rest of the world increased by 18.9% to €199.5bn compared with January 2021.
• Imports from the rest of the world surged by 44.3% to €226.7bn, when compared with January 2021. Increased imports of energy pushed the headline figure northwards.
• Intra-euro area trade rose to €192.3bn, up 24.2% compared with January 2021.

Market Impact

Ahead of today’s stats, the EUR struck a pre-stat and current day high of $1.11189 before sliding to a pre-stat low of $1.10533.

In response to today’s figures, the EUR rose to a post-stat high $1.10605 before falling to a post-stat and current day low of $1.10484.

At the time of writing, the EUR was down by 0.39% to $1.10487.

Next Up

Housing sector day from the U.S will be in focus later today. The numbers are unlikely to influence, however, leaving the EUR in the hands of geopolitics going into the weekend.