ECB released data today indicating a slight decrease in negotiated wage growth to 4.46% in Q4, marking a downturn from the previous quarter’s record high of 4.69%. This development, though modest, is likely to be greeted positively by ECB policymakers, signaling a potential onset of wage growth deceleration anticipated throughout the year.
Despite the reduction, the magnitude of the drop is not substantial enough to prompt ECB to consider an immediate rate cut in March. The data presents a cautious optimism rather than a clear-cut rationale for policy easing. If ECB’s more hawkish members advocate for further evidence of wage growth deceleration, preferring to wait for the next wage data release in May, the likelihood shifts towards a rate cut in June, rather than April, as the more plausible timeline for monetary policy adjustment.
EUR/USD bounces further in European session and the break of 1.0804 resistance argues that a short term bottom was formed at 1.0694, on bullish convergence condition in 4H MACD. Further rebound is now in favor to 55 D EMA (now at 1.0832). Sustained break there will argue that whole fall from 1.1138 has completed and bring stronger rally back to this resistance.
