Market information

Friday, May 21, 2010

Figures published yesterday by the Conference Board shows that the U.S. index of leading indicators in April for the first time in more than one year has decreased. The index fell 0.1% in April after an increase of 1.3% in March. Economists expected an increase of 0.2%. The figure is seen as an indicator for the U.S. growth in the next three to six months.

The U.S. Department of Labor presented a disappointing figure as well. The number of new unemployment claims in the U.S. unexpectedly rose last week. The number of new benefit claims rose in the week ended May 15 by 25,000 to 471,000, economists expected a decline of 4,000.

The Dow Jones closed last night with a loss of 3.6%. Ongoing turmoil drives investors away from shares to bonds of relatively safe countries. Consequently, the German and Dutch interest rates reached yesterday a new record low. The Dutch ten years government yield is at a postwar low of 2.90%.

The 6M Euribor increased by 1 basis point to 0.99%. The 10Y Swap decreased by 2 basis points to 3.03%.

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, May 20, 2010

The debate of Angela Merkel and with it the German decision to ban the speculation has had a major impact on the financial markets. This morning the euro has fallen to its lowest point in four years. As a result, stock prices plummeted, the demand for state and corporate bonds decreased significantly, and the credit derivatives markets fluctuated greatly. Investors were surprised by the debate and in reaction doubts in the stability of the eurozone increased. This result was the opposite of what was intended with the decision.

Against all odds, the low level of the euro compared to the dollar does not boost the export of euro countries outside of the eurozone. In case there is an increase, it is of short duration. Dutch export mainly focuses on other euro countries and the impact of a decrease of the euro will not be big, according to an analyst at Rabobank.

Today will show whether investors still believe in the Spanish economy. Spain will try to sell ten-year bonds at 4% interest for an amount of between EUR 2.5 billion and EUR 3.5 billion. Ealier this week Spain tried to sell bonds with a maturity of 12 to 18 months, but sales were significantly lower than initially was expected. Then EUR 6.44 bln was raised while the expected range was between EUR 6.5 billion and EUR 7.5 billion.

The 6 month Euribor remained unchanged at 0.98%, and the 10 year Swap increased by 2 basis points to 3.05%.

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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Wednesday, May 19, 2010

After the European Parliament approved tighter controls on hedge funds last Monday, the European finance ministers came up with a different agreement regarding the same issue yesterday. Both agreements ensure better investor protection and more transparency concerning the risk and investment policy of hedge funds, but also of funds consisting of private equity, real estate and commodities. The European member states want to determine the rules for non-European hedge funds themselves, while the European Parliament called for a general European “passport” with which foreign hedge funds can gain access to the European market.

In addition, Germany announced an immediate ban on speculative transactions in European government bonds and in shares of ten German financial institutions. The ban mainly concerns the so-called “naked short selling”, but also temporarily prohibits trade in naked credit-default swaps of euro-area government bonds.

The above news led to losses on the financial markets. The Dow Jones decreased by more than 1% and the euro currency recorded a loss of 1.5% against the US dollar. European stock markets opened a percentage point lower this morning.

The 6 month Euribor remained unchanged at 0.98%, but the 10 year Swap decreased by 11 basis points to 3.03% because of above news.

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, May 18, 2010

The European Central Bank has bought EUR 16.5 billion worth of government bonds up to May 14th. This is the result of the first week of buying bonds by the central bank as part of the intervention program members of the monetary union agreed on to stabilize the euro. However, confidence in the euro has not yet returned. The currency fell further on Monday to a new low of USD 1.2321 per euro.

The continuing weakness of the euro has made the dollar more attractive as a currency for investors. The diversification of portfolios over different currencies last year has strengthened the euro, but this effect is now reversing and working against the euro. As a consequence of this effect, net purchases of dollar denoted investments in the United States rose to USD 140.5 billion in March, up almost three times from February.

The Dutch trade surplus has risen to the highest level since December 2007 in March. Imports increased 22% since March last year and exports rose 16% during the same period. This resulted in the current surplus of EUR 4.6 billion.

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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Monday, May 17, 2010

The AEX-index closed 3.1% lower on Friday at 327,24. In Frankfurt, London and Paris the losses amounted to 4.6%. The Dow-Jones index closed at a loss of 1.5% at 10620.16. the main reason for falling share prices is the fact that investors worry about the austerity measures of the euro-countries. 'Because of the government spending cuts, consumers can spend less and that in return is bad for the economy as a whole', stated Kian Liem of the Haags Effektenkantoor.

The continuing anxiety concerning the financial problems of the eurozone also led to pressure on the euro exchangerate. On monday the euro fell to 1.2306 dollar. The lowest rate in 4 years.

In April, US industrial production rose according to expectations. The production increased with 0.8% compared to last month. The figure on the industrial production is considered an important indicator for future economic growth.

The 6M Euribor remained unchanged at 0.98%. The 10Y Swap fell 8 basispoints to 3.12%.

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