The consensus is also forecasting a reduction of 30,000 in the number of unemployed persons. Fifty five thousand fewer individuals were unemployed in March compared to the month before.

Deutsche Bank economist Stefan Bielmeier is forecasting German unemployment to come in a little lower than consensus at 7.7%. He emphasized that, while his prediction was less than that of the consensus forecast, the change was negligible and would not illicit any market reaction.

Bielmeier also stated that the number of unemployed in Germany would fall to 3,255,000, which is 30,000 below March's figure and in line with the consensus.

Lothar Hessler, economist with HSBC Trinkaus, predicted the number to fall by 40,000 in April.

"For the last one and a half years, I've been more optimistic than the consensus," Hessler said.

Regarding the unemployment rate, Hessler is forecasting it to come in at 7.7%, also slightly lower than the expected forecast.

"Up to now, there is a positive impetus from the high volume of orders from the machinery sector and the upturn of the global economy which pushed up the German industrial production," Hessler stated.

"So far, a lot of jobs have been created, for example, in the machinery sector."

Regarding market moving changes in unemployment, "from -20,000 and -80,000, I don't think will cause a big impact," Hessler suggested.

"However, I think that the reaction would be more pronounced if the change was more than expected. I think that the reaction would be stronger at -80,000 than at -20,000."

"This would show that the labour market was stronger than expected and cause a greater reaction," Hessler added.

"If labour market comes in stronger than expected, this would underpin that, for the short term, no change in interest rate in short term was likely."

Looking farther ahead, Hessler expects that unemployment levels will settle at around 3,250,000 in 2008 and added that, if the yearly unemployment figure fell below 3.2 million, this would mean that the labour improvement was continuing and it had not lost momentum.

The ILO March unemployment figures for Germany are also expected to be announced on April 30. Economists are expecting a reading of 7.4%, unchanged from the previous month.

By Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it