Market information

Friday, July 16, 2010

Despite the lowered credit rating of Portugal last Wednesday, they have managed to sell EUR 1.68 billion in bonds. The maturities of the loans are two and nine years. The Italian government succeeded in attracting new capital as well. An amount of EUR 6.8 billion was raised by issuing bonds with maturities up to thirty years.

The funding ratio of pension fund ABP declined further to 95%, well below the prescribed minimum of 105% by the Dutch Central Bank. ABP attributes the decline of the funding ratio, amongst others, to historically low interest rates.

The U.S. investment bank Goldman Sachs and the U.S. Securities and Exchange Commission (SEC) reached a settlement. The settlement is the largest in Wall street’s history and amounts to USD 550 million.

The U.S. Senate has approved a financial reform which should assure that a future financial crisis is avoided. The Reform Act provides the establishment of an oversight board, which should make an end to decades of deregulation in the financial sector.

The 6M Euribor remained unchanged at 1.10%. The 10Y swap increased with 2 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, July 15, 2010

Credit Suisse is suspect in helping clients with tax evasion. That was why the German authorities raided thirteen offices of the Swiss bank yesterday. The German tax authorities suspected this fraud by purchasing a computer disk with bank data.

A number of Asian countries are likely to become victims of their own success. Measures have been taken to cope with the explosive growth by increasing interest rates conservatively, but according to economists that is not a long term solution to this problem.

After 5 days of increasing closings, the Dow Jones closed yesterday at an unchanged rate compared to the previous day. Reason for this is the message of the Federal Reserve that the economic outlook is weakening and risks will increase.

The 6M Euribor has increased with 1 basis point to 1.10% and 10Y swap increased with 1 basis point increase to 2,87%.

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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Wednesday, July 14, 2010

Dutch exports are back at the level before the credit crisis. Statistics Netherlands (CBS) announced yesterday that the export of goods increased by nearly 18% in May compared to the same period last year. The export volume totalled EUR 29.9 billion in May. The increase in exports is largely due to the depreciation of the euro against the US dollar, but also the strong economic growth in Brazil, China and India contribute positively to a higher Dutch export level.

Yesterday Greece entered for the first time the money market, after the measures taken by the European Union (EU) and the International Monetary Fund (IMF). The issuance of the six month government bond, representing a total value of 1.625 billion, was warmly welcomed by investors (3.64 times oversubscribed). The yield on the government bond is 4.65% and thereby lower than the interest rate of 5% that the EU applies to its share in the rescue package.

Credit rating agency Moody's downgraded Portugal's credit rating by two notches yesterday (from Aa2 to A1). The relatively high budget deficit and the low economic growth forecast for Portugal are stated by Moody's as reasons for the downgrade. Credit rating agencies S&P and Fitch have yet left Portugal's credit rating intact so far.

The 6M Euribor remained unchanged at 1.09%. The 10Y Swap increased with 5 basis points to 2.86%.

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Tuesday, July 13, 2010

For the first time after the measures taken by the European Union (EU) and the International Monetary Fund (IMF) Greece will enter the money market. The Greek government will try to sell EUR 1.26 billion in short-term debt. Expectations are that the interest rate on the short-term debt will be a fraction higher than the rate of 5% that the EU applies for its share in the rescue package.

Traditionally, aluminium producer Alcoa was first to publish its results over the second quarter of this year. After the American stock exchanges had closed, Alcoa reported a net result of USD 136 million, in line with the expectations of analysts. Second quarter results of companies will give guidance to the worldwide stock exchanges the coming weeks.

The euro has lost 0.52% of its value to the US dollar on Monday. Investors fear that the outcome for the stress test for European banks will not meet their expectations.

The 6M Euribor increased with 1 basis point to 1.09% and the 10Y Swap decreased with 6 basis points to 2.81%.

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Monday, July 12, 2010

The European and US stocks exchange finished Friday on a 4th consecutive trading day rise. The analysts and investors are positive on the wave of second quarterly results of the large companies which will be announcing this week.

The Bank of England’s (BoE) monetary policy committee, like the ECB, voted on Thursday to hold the current interest rates. The rate will stay at its record low of 0.5 per cent. As widely expected the BoE held off on any measures to expand demand through quantitative easing.

China defied fears about a new slowdown in the global economy by a record increase of 44% in exports last month year-on-year. This led to a large monthly trade surplus in June of USD 20bn. The figures will draw attention again to whether the Chinese currency remains undervalued.

The 6M Euribor increased with 1 basis point to 1.08% and the 10Y Swap decreased with 5 basis points to 2.87%.

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