US-JAPAN: Econ Min To Meet w/Treasury Sec & USTR 17 Apr For Tariff Talks -NHK

ERJ5 97.6875/97.62/97.5625p fly, bought for 0.75 in 10k.

A modest bid in German bonds on the back of Habeck reaffirming the known stance of the Greens when it comes to debt brake reform.

• While the Greens continue to voice their well-documented concerns surrounding defence spending, the door to fiscal negotiations and a deal in the immediate term seems to remain open.
• That explains the limited market reaction in German paper, with the major futures contracts already back from their knee-jerk highs.
• Long end ASWS vs. 3-month Euribor similarly muted, widening by ~0.5bp before fading.

The ECB’s forward-looking wage tracker is due at 1100GMT. The tracker is seen by the Governing Council ahead of each ECB meeting, but is only released publicly the Wednesday after the decision. The focus should be on negotiated wage growth excluding one-off payments, with the other series including lump sums exhibiting more volatility (see charts).

• In the January update, Q4 2025 negotiated wage growth excluding one-off payments tracked at 2.97%, a touch above the 2.92% tracking from the December 2024 vintage.
• Changes in negotiated wage growth should be expected to filter into overall compensation per employee growth. The ECB projected Q4 2025 compensation per employee growth at 2.8% Y/Y in the March macroeconomic projections.
• At the March press conference, President Lagarde noted that “recent wage negotiations point to a continued moderation in labour cost pressures”.
• As such, we expect the tracker to be broadly consistent with the ECB’s latest compensation per employee forecast.
• Note: The horizon of the tracker may stretch to Q1 2026 in the March update, but this has not been confirmed by the ECB.
• The data can be found here. In January, there was no accompanying press release to the raw data.