COMMODITIES: WTI Futures Close to Week's High, But Shy of Initial Resistance

Of note:

EURUSD 1.6bn at 1.0500.

USDJPY 1.34bn at 152.00.

EURUSD 9.58bn at 1.0400/1.0450 (thu).

AUDUSD ~1bn at 0.6375 (thu).

USDCNY 1.93bn at 7.2500 (thu).

EURUSD 1.96bn at 1.0400 (fri).

EURUSD 5.15bn at 1.0450/1.0470 (mon).

• EURUSD: 1.0400 (580mln), 1.0410 (250mln), 1.0415 (361mln), 1.0480 (481mln), 1.0500 (1.6bn).
• USDJPY: 151.50 (447mln), 151.65 (300mln), 152.00 (1.34bn), 152.50 (724mln).
• USDCAD: 1.4200 (257mln).
• AUDUSD: 0.6325 (558mln).

The German labour market deterioration slowed down in Q4 according to detailed quarterly data releasedTuesday. Employment was unchanged on a sequential basis in Q4 vs -0.10% in Q3, which was the second-worst quarter since the global financial crisis. However, excluding the public sector, employment continued to decline, and sentiment also points towards further deterioration ahead, with the IFO institute concluding on "a tendency to reduce staff" amid their Employment Barometer only rising slightly from December's cycle low in January (93.4 vs 92.4 Dec).

• The industrial sector saw its sixth consecutive quarter of declining employment, at -0.40% Q/Q vs -0.43% Q3.
• Employment in the services sector continued to increase (+0.09% Q/Q vs +0.01% Q3) - however, this was driven by the "public service providers, education, health" cluster rising 0.38% Q/Q (vs 0.60% Q3).
• The data adds some context to the -0.2% Q/Q Q4 GDP decline - and implies weak productivity last quarter.
• Average hours worked per employee rose 0.8% Y/Y to 334.8 in Q4, bringing in total hours worked at a 0.7% Y/Y gain. Against the 0.2% working-day adjusted Y/Y GDP decline in Q4, this implies weak productivity also on an hourly basis on a yearly comparison.
• The number of self-employed persons continued to decline in Q4, continuing its long-term downtrend, at -2.2% Y/Y.
• From a long-term structural perspective, the German labour market continues to shift, with the public/health/education cluster gaining greater prevalence in employment (see bottom chart).

Swiss secondary sector production fell -0.68% Q/Q in Q4 on a seasonally-adjusted basis, a sequential deterioration vs Q3's broadly flat 0.02%. This is the weakest reading since Q2'23, when production fell -5.18% sequentially.

• An energy production drop stands out at -10.45% Q/Q, broadly reversing Q3's spike.
• Across the other sectors, industry production also fell by 0.79% (-0.23% Q3), while construction came in at -0.72% (+1.37% Q3). The fact that overall sector production growth was weaker in Q4 than all the subsector readings appears a bit odd, and might be due to the seasonal adjustment methodology.
• The previously-released Swiss flash Q4 GDP report (overall printing +0.4% Q/Q on a sports-event adjusted basis, vs a consensus estimate of +0.3%) noted that growth last quarter was "driven by both industry and the services sector" - which, taking into account the declining industrial production seen in the release today, would mean that the input ratio of production might have fallen (this is because GDP is calculated on a value-added basis, subtracting intermediate inputs from final output).
• This could occur for example if there was a shift towards products with a lower input ratio altogether, for example R&D as opposed to final production.
• Then, on the other hand, Swiss industrial production was at an all-time high just in the quarter before - much in contrast with how poorly the sector is faring in Switzerland's neighbor Germany.