Justin had the data on the substantial slowdown:
- Eurozone wages slow down in Q2 after running hot in the previous quarter
- This just further solidifies the narrative for a rate cut next month and tees up the potential for more in the final quarter of the year.
Via Morgan Stanley:
- "We think that the first quarter has likely been the peak for negotiated wages in the euro area,"
- "In addition, the expected slowdown of momentum in compensations per employee sends an important signal that wage growth is on the way down. Overall, we think that this provides enough evidence for the ECB that wages are heading the right way"
ECB officials are starting to roll out the cut hints too:
- ECB's Rehn cites negative growth risk as reinforcing the case for a rate cut in September
- ICYMI - ECB's Kazaks said he is "very much open" to discussing a September rate cut
