Talking Points:
- German Joblessness decreased by a seasonally adjusted 20k
- Unemployment rate unexpectedly fell to 6.2%, record low
- Euro little changed versus other major currencies
The Euro was little changed versus other major currencies (at the time this report was written) after the German jobless rate fell to a record low 6.2% in January, which marked the lowest level since the German reunification. The prior and expected reading was 6.3%. Joblessness declined by a seasonally adjusted 20K individuals, subsequently lowering the number of people unemployed, which now stands at a seasonally-adjusted 2.73 million. The figure beat expectations for a drop of 8K, and was also stronger than the prior revised drop of 16K individuals.
The data today suggests that the German jobs market remains strong, presumably on positive domestic demand, while headwinds persist from external factors such as a slowing Chinese economy and volatility in the financial markets. As was mentioned today by DailyFX Currency Strategist Ilya Spivak, it seems that sentiment has the ability to trump macroeconomic fundamentals in the current environment. With the market’s focus currently on other themes such as risk trends, implications of possible future monetary stimulus by the ECB, or the rate hike path by the Fed, the positive German figures did little to sway current market sentiment and the Euro was little changed.
