The US job report will be the main focus today. We expect an increase in non-farmpayrolls of 250,000 but see risk of a pay-back from the extra strong April figure. TheADP employment disappointed in April and suggests some downside risk to payrollsalthough the intra-month relationship is not great. The movement in the participationrate makes it difficult to make accurate estimates about the unemployment rate but weexpect it to rise back up to 6.5% following the 0.4pp decline in April.
In Germany industrial production is expected to increase in line with the strongerthan-expected factory orders released yesterday.
German labour costs for Q1 are also due for release today and, in light of the lowinflation in Germany despite very low unemployment, could attract some attention.Since Q2 13 labour costs have stayed around 2% y/y after the growth rate was close to3% in 2011-12.
We expect S&P to upgrade Ireland to the single-A level and remove the negativeoutlook on Italy. Moreover, Moody’s could publish an updated rating on Finland. We expect Danmarks Nationalbank to track the cuts from ECB.
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Danske Bank