German labor demand in September remained relatively unchanged as unemployment rolls increased by 9K versus 10K eyed. The seasonally adjusted unemployment rate for September remained at 6.8% matching its rate in August. Job vacancies declined by -4K versus a decline of -5K in August.

Although labor picture in Germany remains relatively robust this is the fourth consecutive monthly increase in unemployment rolls suggesting that the country’s economy is clearly starting to slow and is no longer generating jobs. Germany may be finally falling victim to the broad economic malaise affecting the region as the recessionary conditions in the periphery are starting to make their way to the core of Europe.

The EUR/USD was marginally lower in the aftermath of the release trading at 1.2870 as the earlier short covering rally in Asia ran out of gas at the 1.2900 level and reports of decline of -1.1% in Spanish bank deposits contributed to the cautious mood in the market. With no other economic data due in Europe, the focus will turn to Madrid and Prime Minister Rajoy’s proposed austerity budget as Spain continues to deal with political turmoil.