Market information

Wednesday, May 12, 2010

A report of the IMF that is published yesterday argues that low GDP growth is the largest threat to the economy of Greece. Under the main scenario, the Greek public debt will sharply rise from 115% of the GDP in 2009 to a peak of 149% in 2013. Hereafter, a decrease is expected to 120% of the GDP in 2020. From 2014 the difference between current revenues and current spending should amount to 6% of the GDP. From this surplus the interest obligations should be paid. However, an important assumption for this scenario is that after 2015 the Greek economy should firmly grow with 2.75%.

Unemployment in the OESO countries remains unchanged in March compared to February. The composite unemployment rate for the world's largest economies was 8.7%. Some countries with high unemployment in March were Spain (19.1%), Ireland (13.2%) and France (10.5%). The unemployment rate in the Netherlands amounted to 4.1% in this period.

The 6M Euribor has remained the same at 0,98%. The 10Y Swap increased by 5 basis points to 3,20%.

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 11, 2010

The EU emergency plan of EUR 750 bln and the purchase of government bonds issued by financial weaker euro countries by the ECB yesterday, led to a rally on the stock markets worldwide. The AEX index closed 7.3% higher and the Dow Jones increased by 3.9%. Banks in particular increased in value, for example ING rose by 24.69%.

On the sovereign bond market, yields on sovereign debt of financially weak euro countries like Ireland, Portugal and Greece dropped significantly. The yield on Greek two-year debt is now 7.61%, compared to 19.13% at the end of Friday. Yield on sovereign bonds of financially stronger countries like the Netherlands, Germany and France went up by several basis points.

The euro however barely increased. The currency peaked around USD 1.3094 yesterday morning, but dropped back to USD 1.2810 at the end of the day. Friday the euro noted USD 1.2705.

German export in March rose by 10.7% compared to the previous month. The German trade surplus amounted to a total of EUR 17.2 billion in March. The German export strongly benefits from the recovery of the growth in Asia.

The 6 month Euribor remained unchanged at 0.98% and the 10 year Swap increased 1 basis points to 3.15%.

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 10, 2010

Last night, European finance ministers reached consensus on a rescue package for member states that can no longer meet their financial obligations. In total, the European Union rescue package entails EUR 500 billion. Next to the aid provided by the European Union, the International Monetary Fund (IMF) contributes EUR 220 billion to the rescue package. The Dutch government contributes EUR 26 billion.

In response to the announced rescue package the rate of the euro against the U.S. dollar appreciated to USD 1.298. Furthermore, both the Nikkei index and the Hang Seng index concluded the first trading day of this week positively.

After the sharp decline in long-term interest rates last week the Swap rates seem to recover sharply this morning. Compared to last Friday the 30Y Swap appreciated over 20 basis points and is 3.50% at the moment.

The 6 month Euribor remained unchanged at 0.98% and the 10 year Swap increased 4 basis points to 3.14%.

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Friday, May 07, 2010

Thursday, the European and American stock indices closed with a loss again. With that, the fear that the Greek debt crisis will spread to other countries remains. The AEX-index dropped 1.4% to 326.19 points. The Dow Jones index fell to a loss of almost 1,000 points, but recovered after about half an hour and eventually closed with a loss of 3.2% on 10520.32 points. The sudden drop of almost a thousand points was due to a mistyped sell order which was big enough to trigger more sell orders across the stock market.

The European Central Bank leaves the refinancing rate unchanged at 1.0%. During the press conference yesterday, ECB president Jean-Claude Trichet also said that the Greek debt problems were not discussed. As a consequence the yield on Greek two-year debt increased to a new high of 16.9%.

The price of metals such as gold rose for the fourth day in a row to a record of USD 921.28. Investors worldwide see gold as a safe way to invest during the Greek debt crisis. This year gold price in euros already increased by 20%.

The euro weakened to its lowest level in almost 14 months and noted USD 1.2664 at the end of European trade yesterday.

The 6 month Euribor remained unchanged at 0.98% and the 10 year Swap increased 2 basis points to 3.10%.

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 06, 2010

For the second consecutive day the financial markets were subject to heavy losses on the equity and bond markets. The Greek debt crisis impacts the euro, where it is expected that the crisis will infect other South European countries.

The euro decreased in two days over 2% to $ 1.29, the lowest point since March last year. In December last year the euro was at record height at $ 1.50.

Euro government bonds from different countries were heavily subject to losses Wednesday. Where Moody’s announced yesterday that it intends to consider a downgrading of Portugal of two notches. The interest rate on two year Portuguese government debt rose by 90 basis points to 5.37%.

With the flight from South European debt, demand for loans from creditworthiness countries like Germany and the Netherlands increases. As a consequence the Dutch interest rate on ten years government debt fell Wednesday to 3.06%.

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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