On Thursday, the German Labour Ministry will report on the German jobless rate and change, both for the month of April. Ahead of the report, however, economists forecast the number of people actively searching for employment will rise by 65,000, adding to March's 69,000 gain and reflecting an increase in the jobless rate to 8.2% in April from 8.1% previously.

Melanie Baker, financial analyst at Morgan Stanley, expects German unemployment to continue its ascent at the start of the second quarter of 2009. She has forecast the ranks of the unemployed will swell by 60,000 as the economy struggles through a pronounced recession. However, Baker noted several factors limit the effects on the labour market.

"These factors range from more generous short-shift subsidies, greater use of work-time accounts and a shortage of skilled labour in some sectors not too long ago," Baker said.

Nevertheless, the unemployment rate will continue to rise in Germany, reaching significant levels next year, the analyst added. "Eventually, we expect the national unemployment rate to hit double-digits in 2010."

Following the German jobless figures, Eurostat will publish its preliminary estimates of euro zone inflation for April. Expectations are currently for the consumer price growth rate to have accelerated to 0.7% year-over-year, up 0.1 percentage points from March's record low 0.6%.

Despite the modest increase in energy prices in April, economists at Capital Economics expect the headline rate to have fallen to a new record low, due to the deterioration in economic activity and its downward effect on the core inflation rate.

"Accordingly, we see annual headline inflation falling from 0.6% to 0.5%, far below the ECB's definition of price stability," the economists said in a research note. "Inflation might turn negative as soon as next month."

Regarding speakers, European Central Bank (ECB) Governing Council member Ewald Nowotny will give a speech at a briefing in Vienna, Austria, while ECB member Guy Quaden will speak at a conference hosted by the National Bank of Belgium, in Brussels, Belgium.

All times in EDT.

2:00 DE ILO Unemployment Rate March Exp: 7.5% Prior: 7.4%

2:45 FR Producer Prices (M/M) March Exp: -0.4% Prior: -0.6%

2:45 FR Producer Prices (Y/Y) March Exp: -5.3% Prior: -4.5%

3:30 EU ECB's Nowotny Speaks at Briefing in Vienna

3:55 DE Unemployment Change April Exp: +65K Prior: +69K

3:55 DE Unemployment Rate April (SA) Exp: +8.2% Prior: +8.1%

4:00 IT Large Company Employment (Y/Y) (NSA) February Prior: -0.7%

5:00 IT CPI (incl. tobacco) (M/M) April Preliminary Exp: +0.2% Prior: +0.1%

5:00 IT CPI (incl. tobacco) (Y/Y) April Preliminary Exp: +1.1% Prior: +1.2%

5:00 IT CPI - EU Harmonized (M/M) April Preliminary Exp: +0.5% Prior: +1.2%

5:00 IT CPI - EU Harmonized (Y/Y) April Preliminary Exp: +1.1% Prior: +1.1%

5:00 EU Euro-Zone CPI Estimate (Y/Y) April Exp: +0.7% Prior: +0.6%

5:00 EU Euro-Zone Unemployment Rate March Exp: +8.7% Prior: +8.5%

April 30 EU ECB's Quaden Speaks at a Conference on the Crisis

April 27-30 GB Nationwide House prices (M/M) (SA) April Exp: -1.2% Prior: +0.9%

April 27-30 GB Nationwide House prices (Y/Y) (NSA) April Exp: -15.7% Prior: -15.7%

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

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