Market information

Wednesday, April 07, 2010

Good morning,

Yesterday the cost of borrowing by the Greek government rose even further. Yields on Greek 10 year bonds rose to 7.16%, more than 400 basis points above German yields. The rise is due to growing concerns about the rescue plan the European Union has formulated for Greece. Most countries from the Euro zone are willing to grant Greece subsidized loans at a yield of 4%. Germany however does not want to subsidize Greece and wants the country to pay current yields, about 6-7%

China’s position on the value of the renminbi is becoming more moderated. Several government officials have indicated that a new rate might be at hand, according to the Financial Times. The renminbi, the Chinese currency, has been pegged against the dollar for several years. According to the United States government, the currency is held at an artificially low rate. This makes Chinese exports cheap, strengthening the Chinese economy and weakening the American trade balance.

Furthermore, investor confidence as measured by the Germany based Sentix institute, increased further. The index rose to 2.5 points, up 10 points from March. It is the first positive value for the index since the collapse of Lehman Brothers. An index above zero means that there were more bullish than bearish respondents. Sentix announced at the publication of the index that investors aren’t worrying about poor government finances in some parts of the Euro zone. The devaluing euro has improved the trading terms for the export sector, stimulating production.

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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Tuesday, April 06, 2010

Figures, published Monday, from the 'Institute for Supply Management' (ISM) showed that the US purchasing managers index for service in March rose faster than expected. The index rose from 53.0 in February to 55.4 in March, where 53.5 was expected. Above 50 points the index indicates an increase of economic activity.

In the US employment grew more slowly than expected. This is shown from figures published Friday by the American Labor Department. Economists expected a gain of 200,000, however the employment growth was 164,000. The unemployment rate for March remained as expected at 9.7%, which is equal to the rate for February.

Monday, the 'National Association of Realtors' (NAR) published the pending home sales index for February in the US. The pending home sales rose 8.2% on a monthly basis. In January there was a decrease of 7.6%. The pending home sales index tracks the number of home resales under contracts. They will be completed within one or two months, and historically the index is a reliable indicator of final sales of existing homes.

The 6M Euribor remained unchanged at 0.95%. The 10Y Swap rate increased 7 basis points to 3.34%.

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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Friday, April 02, 2010

As a result of the economic crisis the Dutch government will have to structurally lower the budget with €18 billion. Therefore an official governmental studygroup presented yesterday a proposal with cuts totalling €36 billion. The presented variants will impact health care, housing and unemployment the most.

The AEX index closed Thursday at its highest point in 1,5 years at 351,44. The main reasons were better than expected figures on the US economy. The new unemployment applications were lower than expected (439.000 instead of 440.000). The development of the US industrial sector also exceeded expectations. This resulted in a higher closing of Wall Street: 0,7% at almost 11.000 points.

The better than expected macro-economic figures lead to an improved confidence of the Dutch in the economy. The percentage of people who think that the general economic climate will worsen in the upcoming 12 months decreased from 44% to 26%.

The 6M Euribor increased 1 basis points to 0.95%. The 10Y Swap rate decreased 1 basispoint to 3.27%

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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Thursday, April 01, 2010

Euro zone unemployment rose to 10.0% in February, a rise of 0.1% from a month earlier. This is the first double figure Euro zone unemployment rate since 1998. Unemployment for the Netherlands, as announced earlier by the Dutch Statistics Bureau was 5.7%.
Furthermore, consumer prices in the Euro zone rose to 1.5% in March compared to a year earlier. Analysts expected a rise of 1.1%, still more than inflation in February, at 0.9%.
Rising oil prices are primarily responsible for the rise in inflation. Together with still increasing unemployment, economists are growing concerns about the ability of companies to pass on rising costs.
The European Central bank shall convene on April 8th to make a new interest rate decision. With fast rising inflation and a target inflation of 2%, it might be possible for the ECB to raise the primary interest rate.

In the United States non-farm payrolls decreased for 26th consequent month by 23,000. However, the drop in employment was the smallest in two years. The drop in employment was not expected by economists who predicted a rise in employment of 40,000. The total number of jobs lost was the largest in the construction sector.
Orders for factory goods rose 0.6% in the United States, more than the 0.5% forecasted by analysts. Orders for capital goods, excluding airplanes and military equipment, rose 2%.Economists view this as a strong sign that economic activity will be picking up in the US in a few months.

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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