EUROZONE DATA: ECB Wage Tracker Continues To Point To Deceleration
The ECB’s latest wage tracker update saw immaterial updates relative to the December 2024 vintage. The path for wages – based on signed collective bargaining agreements excluding one-off payments – was revised a shade higher through 2025. The data continues to underscore ECB expectations for wages to moderate through this year, eventually helping to drive disinflation in services.
- As of Q4 2025, the ECB’s headline wage tracker (including smoothed one-off payments) was 1.5% Y/Y, compared to 1.4% Y/Y in the December update. This is still a notable deceleration from the 5.3% Y/Y growth expected in Q4 2024.
- Excluding one-off payments, Q4 2025 wage growth is expected at 3.0% Y/Y (vs 2.9% in the December update). This is down from an expected 4.7% Y/Y in Q4 2024.
- The ECB’s December macroeconomic projections see Q4 2025 compensation per employee at 3.0% Y/Y.
- The ECB’s latest Corporate Telephone Survey saw contacts expect wage growth to decelerate to 3.6% in 2025 (vs 4.3% in 2024). Meanwhile, the SAFE survey also pointed to easing: 12-month ahead wage increases expected at 3.3% Y/Y vs 3.5% in the prior survey).
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CANADA: Betting Markets Shift To 95% Probability Of Imminent PM Resignation
Following earlier headlines in the domestic press claiming that PM Justin Trudeau could resign/announce his resignation as soon as 7 Jan (see 'CANADA: Trudeau Increasingly Likely To Announce Exit This Week-Globe&Mail', 0725GMT), betting markets have shifted significantly. Data from Polymarket shows political bettors assigning a 95% implied probability that Trudeau will announce his resignation before February, while data from Kalshi shows bettors assigning the same 95% implied probability that Trudeau will resign before April. Prior to the publication of the speculation on 5 Jan, the implied probability of an immediate resignation stood around 50%.
- There has been a flurry of media stories claiming that former BoC and BoE governor Mark Carney could launch a bid for the leadership of Trudeau's centre-left Liberal Party of Canada (LPC). CTV News reports "Since Boxing Day, sources say Carney has made and fielded dozens of calls to Liberal MPs and political organizers who view him as a potential replacement for Trudeau."
- Finance Minister Dominic LeBlanc, a close ally of Trudeau, is seen as a potential interim PM if Trudeau goes immediately. Alternatively, he may seek the LPC leadership. Former Finance Minister Chrystia Freeland, whose resignation in December sent shockwaves through Canadian politics, is another likely runner.
- With the Trudeau gov't currently a minority administration, it remains to be seen whether a new Liberal leader would seek to maintain the current situation or risk a snap election with the LPC trailing Pierre Poilievre's centre-right Conservatives by a double-digit margin in opinion polling.
Chart 1. Betting Market Implied Probability PM Trudeau Announces Resignation Before February, %
Source: Polymarket
MNI: EUROZONE FINAL DEC COMPOSITE PMI 49.6 (FLASH 49.5); NOV 48.3
- MNI: EUROZONE FINAL DEC COMPOSITE PMI 49.6 (FLASH 49.5); NOV 48.3
- MNI: EUROZONE FINAL DEC SRVICES PMI 51.6 (FLASH 51.4); NOV 49.5
