New data release: ECB wage tracker indicates negotiated wage pressures stable in 2026
The desk believes that the ECB's wage tracker data signals a stable wage growth outlook, which may influence the euro's trajectory against the dollar. Per the full note source, the ECB wage tracker indicates negotiated wage growth stabilizing at around 2.6% for 2026, with a slight easing from 3.8% in 2025. This stability in wages, coupled with the ECB's cautious approach to monetary policy, suggests a more measured path for the euro as inflation pressures moderate. Upcoming inflation data releases on June 2 will be critical in assessing the market's response to these wage dynamics.
What the desk is arguing
The desk posits that the ECB wage tracker, indicating stable negotiated wage growth at 2.6% for 2026, reflects a broader trend of moderated inflationary pressures in the euro area. Per the full note source, this figure is unchanged from previous assessments, suggesting that wage pressures are stabilizing rather than escalating, which could influence ECB policy decisions moving forward.
Supporting this view, the tracker shows a decrease in negotiated wage growth from 3.8% in 2025 to 2.6% in 2026 when excluding one-off payments. This moderation is significant as it aligns with the ECB's ongoing efforts to manage inflation expectations while maintaining economic stability.
Where it sits in our coverage
Our consensus target for EUR/USD is 1.075, with a range from 1.04 to 1.12. Specific firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk's view aligns closely with the upper end of the consensus range, indicating a more optimistic outlook for the euro compared to bofa, which holds a more cautious stance.
How other firms see it
Firms like jpmorgan and citi are aligned with the desk's perspective, anticipating a stronger euro as wage growth stabilizes. Conversely, bofa remains skeptical, projecting a weaker euro outlook based on their inflation expectations.
The EUR/USD trajectory is closely tied to upcoming inflation data releases, particularly the CPI figures on June 2, which will provide insights into the effectiveness of the ECB's wage management strategies and overall inflation control.
What the calendar says
With the CPI YoY data set for release on June 2, market participants should be vigilant as this could significantly impact the euro's performance against the dollar, especially in light of the ECB's wage growth outlook.
Key takeaways
- 01ECB wage tracker indicates stable wage growth at 2.6% for 2026.
- 02Negotiated wage growth is easing from 3.8% in 2025, reflecting moderated inflation pressures.
- 03Upcoming CPI data on June 2 will be crucial for assessing market reactions.
- 04The desk's view aligns with the upper end of the consensus range for EUR/USD.
Market implications
Watch for EUR/USD to respond to the CPI data on June 2, as any surprises could shift the market's perception of the ECB's monetary policy stance. A break above 1.10 could signal stronger euro support.
PRESS RELEASE New data release: ECB wage tracker indicates negotiated wage pressures stable in 2026 6 May 2026 ECB wage tracker updated with wage agreements signed up to middle of April 2026; forward-looking horizon remains unchanged at end-December 2026 Forward-looking information is broadly unrevised and indicates stable negotiated wage growth at around 2.6% by the end of 2026 ECB wage tracker with unsmoothed one-off payments at 3.0% in 2025 and 2.6% in 2026 The European Central Bank (ECB) wage tracker, which covers active collective bargaining agreements, indicates negotiated wage growth with smoothed one-off payments of 3.2% in 2025 (based on a coverage of 51.3% of employees in participating countries) and 2.3% in 2026 (based on a coverage of 41.9% ). Compared with the March 2026 data release, the ECB wage tracker with smoothed one-off payments is unrevised for 2026. The ECB wage tracker with unsmoothed one-off payments indicates negotiated wage growth of 3.0% in 2025 and 2.6% in 2026.
The wage tracker excluding one-off payments indicates an easing of negotiated wage growth from 3.8% in 2025 to 2.6% in 2026. The headline ECB wage tracker is better suited to describing quarterly or monthly dynamics in negotiated wages as it smooths one-off payments over time. Meanwhile, the ECB wage tracker with unsmoothed one-off payments is better suited to describing yearly dynamics.
For 2026 the headline ECB wage tracker averages 1.8% in the first quarter, 2.1% in the second quarter, and 2.6% in the third and fourth quarters. The rise in the wage path over the course of the year is related to the dissipation of the mechanical downward effect of large one-off payments that were made in 2024 but not in 2025. This mechanical effect is expected to virtually disappear over the course of 2026 in the headline indicator.
The deeply uncertain economic situation could lead to a stronger role for one-off payments in the coming year, but this is not yet reflected in the new collective bargaining agreements signed since the March 2026 data release. The ECB wage tracker with unsmoothed one-off payments reflects a stable and less volatile outlook than in previous years for negotiated wage growth in 2026 (averaging 2.9% in the first quarter, 2.6% in the second quarter, and 2.5% in the third and fourth quarters). The wage tracker excluding one-off payments is expected to hover around 2.6% in 2026 (averaging 2.7% in the first quarter and 2.6% for the remainder of the year), indicating more moderate dynamics in negotiated base wages than in recent years.
Employee coverage for 2026 stands at 45.6% in the first quarter of the year, 43.5% in the second quarter, 39.5% in the third quarter and 38.8% in the fourth quarter. See Chart 1 and Table 1 for further details. For this data release, the wage tracker data for Austria were expanded and they now start in January 2013.
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