Market information
Friday, February 05, 2010
The refinance rate of the European Central Bank (ECB) has remained unchanged at 1.00%, which was determined at the last board meeting. The president of the ECB, Trichet, stated that the European economy will slowly expand in 2010, where the unemployment rate will rise. The short inflation rate expectation remains round about 1%.
The initial jobless claims has increased unexpectedly in the last week of January. It was expected that this number decreased with 15 thousand, instead the initial jobless claims rose with 8 thousand to 480 thousand. Today the unemployment rate over January will be announced. It is expected that this rate will remain constant at 10%.
Spain has announced that the budget deficit will be higher than the expected 11,4% of the Gross Domestic Product. At an auction of government bonds Portugal raised only 300 million of the expected 500 million.
Due to the problems in these two countries and Greece and the unexpected increase of the jobless claims, the stock indices decreased worldwide. The AEX index decreased with almost 3%, being the biggest decrease in more than 2 months. The Dow Jones index decreased with 2,61%, being the biggest decrease since April 20, 2009.
The 6M Euribor remains constant at 0,97%. The 10Y swap decreased with 8 basis points to 3,46%.
In the attachment below, today’s market data on money and capital market rates as well as other rates are presented. For more history of these rates or other rates feel free to ask: .(JavaScript must be enabled to view this email address).
Thursday, February 04, 2010
The government budget deficit of Greece, 12.7% over 2009, is above the European norm. This year, Greece needs to raise € 53 billion capital from the market to finance its debt, approximately 20% of the gross domestic product. Partly due to the above, the interestrate on Greek sovereign bonds increased significantly. To solve this problem the European Committee wants Greece to cut costs. The target is to reduce the deficit to less than 3% at the end of 2012. The committee thinks the involvement of the IMF is unnecessary. Many European member states disagree and think the IMF should interfere.American and European supervisors want to put a limit on the size of ETF-indexfunds. The market for these exchange traded funds last year grew more than 43% and it is expected that the total invested amount will exceed the 1.300 mrd dollar limit this year. The popularity results from the fact that ETFs track an index or commodity, as a result of which it is also possible for private individuals to speculate on for example raw oil, natural gas or CO2-emmission rights. Disadvantage and reason for the desired constraints is that this popularity causes extreme exchange rate movements on mainly the commodity market.
On February 9, the Dutch state reopens a loan to raise € 2 to 3 billion. The loan has a tenor of five years and has a yearly interest rate of 2,75%.
The 6M Euribor remained unchanged on 0,97%. The 10Y Swap increased with 1 basispoint to 3,44%.
In the attachment below, today’s market data on money and capital market rates as well as other rates are presented. For more history of these rates or other rates feel free to ask: .(JavaScript must be enabled to view this email address)
Wednesday, February 03, 2010
The plans by U.S. President Obama to limit the size of commercial banks have resulted in the decrease of share prices of the global banking sector by 5.3%. This has also affected the spread on bonds issued by the financial sector. The spread on ten-year bonds of bank loans increased 14 basis points since January 21 to 238 basis points compared to U.S. government bonds. Moreover, the spread on non-financial corporate bonds, according to an index of Bank of America, rose 6 basis points to 166 basis points since January 14.
The rate of the 3M Euribor is 0665%. This is the lowest level ever. According to the various market participants, the Euribor rates will increase in the short term. The main reason mentioned is that the ECB has announced that the emergency package, which was offered to help solving the credit crunch will be reduced. The expectation is that this will express itself in not extending a loan of € 442 billion to European banks, which expires in June. This will provide less liquidity in the market, and may cause the the inter-bank to go up.
Tomorrow, the ECB announces the refinancing rate. The current rate is 1% and the expectation of analysts is that this rate will remain unchanged this month.
The 6M Euribor remained unchanged at 0.97%. The 10Y Swap is increased 1 basis point to 3.43%.
In the attachment below, today’s market data on money and capital market rates, as well as other rates are presented. If you would like more history or information of these rates or other rates feel free to ask: .(JavaScript must be enabled to view this email address)
Tuesday, February 02, 2010
Reports of purchasing manager indices indicate that manufacturing has begun the new year strongly. Indices in the United States, UK, India, South-Afrika, Russia and the Netherlands all increased in Januari. The shrunken stockpiles are being expanded and companies are buying production materials to meet growing demand. For example the American purchasing manager index increased with 3.5 points to 58.4 and in the UK the index reached its highest point since 1994 with 56.7points.The American ministry of Trade has published figures yesterday about personal income and personal expenses for December. Incomes rose 0.4%, anaylst expected a rise of 0.3%. The personal expenses increased 0.2%, less than the 0.3% economists expected.
The Dow Jones Economic Sentiment Index (ESI) came out at 38.8 in Januari. A rise as to 38.7 in December. The ESI tries to measure the health of the American economy by analysing articals published in 15 daily newspapers in the US. There is a risk of downturn in the economy if the index goes below 50 points.
In the attachment below, today’s market data on money and capital market rates as well as other rates are presented. For more history of these rates or other rates feel free to ask: .(JavaScript must be enabled to view this email address)
Monday, February 01, 2010
Last Friday, the U.S. Department of Commerce announced a GDP growth of 5.7% for the fourth quarter of 2009. It is the strongest QoQ growth in the past six years. The growth exceeded the expectations of analysts who counted on a growth of 4.6%. The strong growth was mainly caused by companies that complemented their stocks again. On an annual basis the economy declined by 2.4%.The better than expected growth rates for the U.S. economy could not prevent declining prices on New York stock exchanges. The Dow Jones index lost 0.5% on Friday and the S&P 500 lost 1%. Investors are not convinced that the higher than expected growth in the fourth quarter results in a period of steady growth, because it would be a brief revival after government action.
The European Commission investigates the guarantee that the Swedish government provides for the loan of the European Investment Bank to Saab of EUR 400 million. European regulation allows Member States to provide guarantees for loans of poor performing companies, but a premium should be paid. The commission examines whether the new combination Saab Spyker pays a sufficient amount to the Swedish government.
The 6M Euribor increased to 0.97% and the 10Y Swap decreased with 3 bp to 3.42%.
In the attachment below, today’s market data on money and capital market rates as well as other rates are presented. For more history of these rates or other rates feel free to ask: .(JavaScript must be enabled to view this email address)
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