Market information

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)

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