Market information

Monday, January 25, 2010

Economists see a decreasing economic recovery in the Eurozone. Last week, it was announced that the German economy increased only a few tenths of a percent in the last quarter of 2009. The figure for the purchasing managers index was also published last week. This index decreased for the first time since February 2009 from 54.2 to 53.6, where economists had expected a slight increase. A figure above 50 still implies that there is expansion, but it is slightly decreased. Other reasons mentioned for the moderate growth in the Eurozone are the expiry of government action and the slow rise of unemployment.

There is uncertainty about the position of Ben Bernanke as chairman of the Federal Reserve Bank. It is uncertain whether there is a majority in the Senate for reappointment for a term of four years. President Obama thinks that this majority will be achieved. The tenure of Bernanke is important, because a plan for the commercial banks to limit risk taking could be delayed substantially when Bernanke will not remain as president of the FED.

The Chinese government will take measures to prevent the economy from overheating. In a report by Citigroup it is stated that the central bank will make borrowing money more difficult by raising interest rates. The Chinese economy the fourth quarter grew 10.7% (YoY).

The 6M Euribor remained stable at 0.97%. The 10Y Swap remained unchanged at 3.44%.

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