Market information

Wednesday, June 30, 2010

Yesterday, stock indices worldwide suffered great losses again. The first reason was the the American research institute The Conference Board, which decided to lower its estimates for the growth of the Chinese economy. The previous growth forecast for the next three to six months amounted 1.7%, but is now revised to 0.3%.

A second reason for the heavy losses in stock markets was an unexpected decrease of the consumer confidence level in the U.S.. After a three month increase, the index declined by almost ten points to 52.9% in June.

Lastly, new concerns about banks contributed to the losses of yesterday. The European banks have to pay EUR 442 billion back to the ECB this Thursday, what is seen as a test. This amount of money was issued last year as an emergency mean to prevent liquidity problems due to limited access on the money market. As a consequence of the above, interbank rates rose to their highest point in months.

Eventually, the AEX index closed 3.5% lower at 319.03 points and the Dow Jones lost 2.7%.

The 6M Euribor remained unchanged at 1.04% and the 10Y Swap also remained the same at 2.90%.

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Tuesday, June 29, 2010

The credit facility of one year loans offered by the European Central Bank (ECB) to provide liquidity to banks has matured this week. The measure, charging 1.0% interest, was necessary to keep banks liquid and stimulate lending. The Financial Times reports that banks using the facility have troubles finding new liquidity in the money markets. Interbank lending is at a standstill and has not yet improved since the collapse of Lehman Brothers in 2008.

The M3 money supply in the euro zone has decreased 0.2% in May compared to a year earlier. Published by the European Central Bank this contradicts expectations of analysts. They expected a rise of M3 of 0.4%. Despite this drop in money supply there is a rise in the amount lent to the private sector. Consumers and businesses borrowed 0.2% more in May compared to a year earlier.

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, June 28, 2010

The leaders of the 20 major economies who met this weekend during the G20, agreed to halve their government budget deficits by the year 2013. In 2016 their government debts should also be reduced. Both these aims should strengthen confidence levels on financial markets and should show that the poor financial situation of some countries is globally not accepted.

During the G20 meeting, a bank levy was discussed as a possible instrument to make banks pay for the financial crisis. However, no international guide lines were set and therefore countries are left with the choice whether to pursue a financial levy for banks or not.

The 6M Euribor remained unchanged at 1.03% and the 10Y Swap increased by 4 basis points to 2.93%.

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Friday, June 25, 2010

Yesterday, Eurostat announced that the level of new industrial orders in April was 22.1% higher than last year. The increase in April was the highest in the last 10 years. Analysts were expecting an increase of 21.5%.

The pension fund of the U.S. state of New York is preparing a lawsuit to make BP liable for damages suffered on its investments in BP. The pension fund (asset value of $133 billion) says that BP brought the share price down by spreading misleading information. Dutch pension funds are also considering such steps in the future. Het Financieele Dagblad reports that APG and PGGM are awaiting an independent investigation before proceeding with legal action against BP.

Investment company HAL Holding has taken a stake in medical service provider Bosman. The activity is added to Livit, which HAL acquired in 2007. The investment is focused on building a nationwide organization that focuses on the sale of orthopedic devices. HAL used this buy-and-build strategy before in the markets for glasses and hearing aids.

The 6 month Euribor increased with one basis point to 1.03% and the 10 year Swap decreased four basis points to 2.89%.

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, June 24, 2010

The Federal Open Markets Committee (FOMC) of the Federal Reserve (Fed) has made its interest rate decision yesterday. The interest rate the central banks will demand for lending money will remain between 0.00% and 0.25%.

New homes sales in the United States have slowed in May to approximately 300,000. This is a decline of 32.7% compared to April. The lowest number of sold homes since measurement began in 1963. The drop in home sales is attributed to the ending of a tax credit for new home buyers. This makes it less attractive to buy a new home.

Furthermore, the purchasing manager indices for the services and manufacturing sectors in the euro zone have been published. The index for the services sector is 55.4 for June, a 0.8 point decline compared to May. The manufacturing index stands at 55.6, a 0.2 point drop. An index of more than 50 points indicates sector growth. Economists see the increasing unemployment and debt crisis as causes for the decline of the economic activity. However, the weak euro is stimulating the economy as imports are relatively cheap for countries outside the euro zone.

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).

Download market data

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