Euro zone wage growth slows, ECB more likely to cut interest rates again

A key gauge of eurozone wages has eased, strengthening the case for the European Central Bank to continue cutting interest rates next month.

Data released by the European Central Bank on Thursday (August 22) showed that negotiated pay rose 3.6 percent in the second quarter from a year earlier. That was down from 4.7 percent in the previous three months and roughly in line with estimates from Bloomberg Economics Research and analysts at Morgan Stanley and Citi.

German bunds pared losses, with the 10-year yield up 3 basis points to 2.22 percent. The euro slipped against the dollar, down 0.1% at 1.1139 after earlier rising as high as 1.1164.

With three weeks to go until the ECB's September policy meeting, markets expect the central bank to cut its deposit rate for a second time, following the first cut in June. At the same time, officials will receive more details on salaries, as well as this month's inflation data and economic forecasts through 2025.