Eurozone Unemployment Remains at Record 12.1%

Eurostat, the statistical office of the European Union, reported on Wednesday that unemployment in the eurozone held at a record high level of 12.1%.

Levels of joblessness varied widely among the 18 euro-zone member states, with the lowest unemployment rates observed in Austria (4.8%) and Germany (5.2%). The highest rates were measured in Greece (27.4% in September 2013) and Spain (26.7%).

Youth Unemployment

Youth unemployment also remained persistently high in the eurozone. In November 2013, the youth unemployment rate (under 25) was 24.2%, rising by 2,000 to 3.575 million. The lowest eurozone youth unemployment rates were seen in Germany (7.5%) and Austria (8.6%) and the highest were in Greece (54.8% in September 2013) and Spain (57.7%).

Retail Sales Rebound

Eurostat reported on Wednesday that November eurozone retail sales posted their strongest monthly increase since 2009, rising by 1.4% from October. The figure beat analyst expectations of 0.2% by a wide margin, fueling confidence in the region’s economic recovery.

Weak Inflation

Eurostat reported on Tuesday that eurozone inflation came in lower than expected in December. The weaker than expected level of inflation highlights deflationary risk in the eurozone and could influence ECB policy at their upcoming meeting this Thursday.

The Consumer Price Index (CPI) rose by 0.8 percent year-on-year in December, missing analyst expectations of 0.9 percent. The ECB's inflation target is 2 percent.

EUR/USD

The euro traded at its lowest levels in over a month against the U.S. Dollar on Wednesday. The greenback was bolstered on Tuesday by news that the U.S. trade deficit shrank by 12.9 percent in November. Investors will be watching the U.S. Employment Report closely this Friday for signs of a sustained recovery. Analysts expect the U.S. employment rate to remain at seven percent and that Nonfarm Payrolls will fall to 196K from the prior month's reading of 203K.

EUR/USD Daily Chart

Looking at the EUR/USD daily chart we can see that price is still well above the 200 day simple moving average at 1.3318. Momentum oscillator RSI has yet to enter oversold territory, defined as readings under 30.