Market information

Friday, December 09, 2011

This morning, the EU leaders announced that the permanent European emergency fund for European countries in difficulties (ESM) will be implemented in July 1012. Additionally the countries of the European Union decided that a stricter compliance of the budgetary rules is necessary to tackle the debt crisis. This is to be achieved by automatic penalties and appointing a budget Commissioner. How the leaders are going to change the European Convention, is still unclear. Several countries, including Great Britain, are not in favor of radical changes and have pulled back from the discussion about drastic changes during the eurotop in Brussels.

Friday morning, the EU leaders have also announced that the countries of the European Union will give 200 billion Euro to the International Monetary Fund (IMF). This will enable the IMF to help countries in the Euro-zone.

Yesterday the ECB reduced its interest rate by 0.25 percentage point to 1%. The ECB further decreased its expectation for economic growth in 2012. Earlier this year an economic growth of 0.4 à 2,2% was expected. Now the ECB predicts that the economy of the euro zone will move between a decrease of 0.4% and a growth of 1%. Additionally, the ECB announced that they will help banks through the provision of loans with a maturity of 3 years. All requests for credits will be granted to prevent a new credit crisis.

The 6M Euribor remained unchanged at 1.70%. The 10Y Swap decreased by 13 basis points to 2.54%.

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