US employers see no rush to lift wages

•      US employers see no rush to lift wages

•      The employment cost index (ECI), a broad measure of wage and benefit expenditures rose 0.6% qoq in Q4, from 0.7% qoq in Q3. Annual rate unchanged at 2.2%, below the avg. compensation gains of about 3.5% for the 2001-2007 period.

•      The 1st estimate of the US GDP showed that the economy slowed in Q4, missing expectations and falling from its fastest pace in eleven years in Q3.

•      Doubtfully this will change the Fed’s view on interest rates. It could though push rate hike expectations back a bit.

•      Today:

•      We get the manufacturing PMI figures for January from several European countries, including the UK, and the final figure for the Eurozone as a whole.

•      US: Final Markit manufacturing PMI and the ISM manufacturing index both for January; Personal income and personal spending; The yoy rate of the PCE deflator and core PCE.

•      This week:

•      Tuesday: the Reserve Bank of Australia holds its policy meeting. High pressure for a 25bps rate cut, we believe the Bank will simply shift to an easing bias and hint a rate cut at a future meeting. Could be AUD-negative.

•      Wednesday:  US ADP report is expected to show that the number of jobs gained in January decreased from December.

•      Thursday: The Bank of England meets to decide on its policy rate.

•      Friday:  The main event of the week: the US non-farm payrolls for January. The market consensus is for an increase in payrolls of 231k, down from 252k in December. A reading above 200k, will show that the US economy has added at least 200k jobs for 12 consecutive months.