ITALY DATA: Unemployment Rate Ticks Higher, But Still Close To Multi-year Lows
The Italian unemployment rate rose to 6.2% in December, from a two tenth upwardly revised 5.9% prior and consensus of 5.7%. The uptick was largely due to an increase in the labour force, with total employed persons little changed relative to November.
- Italy’s unemployment rate remains close to multi-year lows, which combined with growing real wages should support household consumption in 2025.
- The Q4 flash GDP press release flagged a negative contribution from domestic demand, but no additional details on the breakdown between consumption, investment and government spending.
- 3m/3m employment growth was 0.1% (vs 0.2% prior), the lowest sequential growth rate since October 2022.
- With early signs that employment (and by extension, hours worked) growth is running out of steam, additional GDP growth will need to be fuelled increasingly by stronger productivity metrics. That’s a worrying prospect, with Italian productivity growth firmly below the pre-covid trend.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Yields Slip to 10D Lows Into Year End, Early Cash Close
- Treasuries added to Monday's rally overnight -- back near December 20 levels before drawing some sell interest in early London trade. Average to small year-end duration extensions: US +0.07Y, EU: +0.04Y, UK -.02Y (Bbg).
- The Mar'25 10Y contract trades 109-03 last (+4) vs. -06 high on modest year end volume of just over 135k. Tsy 10Y yield tapped 4.5027% low overnight, curves are looking modestly flatter: 2s10s .966 at 28.317, 5s30s -1.864 at 37.011.
- Projected rate cuts into early 2025 look steady to slightly higher vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -21.3bp (-19.5bp), Jun'25 -30.8bp (-28.8bp).
- Today's economic data (prior, est) limited to FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, followed by Dallas Fed Services Activity (9.8, --) at 1030ET.
- Reminder: early cash Tsy close at 1400ET, futures at normal time of 1600ET.
- For next week: the NYSE Group markets will close on January 9 in observance of the National Day of Mourning for President Carter (New York Stock Exchange, NYSE American Equities, NYSE American Options, NYSE Arca Equities, NYSE Arca Options, NYSE Chicago and NYSE National), while the CME Group has opted for early close, link HERE. FI open outcry will close at 1300ET, GLOBEX shortly after at 1315ET next Thursday.
EUROPEAN INFLATION: Irish HICP Accelerates in December, Core Also Higher
Irish HICP rose by 0.5pp to 1.0% Y/Y in December, its highest rate since August and the third consecutive acceleration. This comes as energy price deflation tapered off amid base effects, to -4.6% Y/Y vs -7.7% in November.
- The core rate (excl. energy and unprocessed food) meanwhile accelerated slightly this month, to 1.6% Y/Y vs 1.5% November.
- Food inflation stands unchanged at 1.7% Y/Y in December.
Looking more broadly at the December Eurozone inflation round, the prints released so far (Spain, Belgium, Portugal) generally underpin calls for energy-driven headline upticks this month. However, core rates also appear to have accelerated a bit so far - analysts were rather looking for a broadly unchanged print for the overall Eurozone.
- Heavy-weighted Germany, France, Italy and the Netherlands, which are all scheduled to release their national-level prints next week, do not necessarily have to tilt in the same direction, however, and it might be that some acceleration for the countries which released so far was indeed expected - so the signal for the overall core print might not be clear for the time being.
EUR: FX Exchange traded Option
FX Exchange traded Option, looks like a new short term play, expiry Friday.
Thursday's Mfg PMIs are final reading, and US ISM Mfg on Friday is the only Data of real note.
- EURUSD (3rd Jan) 1.0575c, bought for 0.00030 in 1k.
