Market information

Tuesday, August 31, 2010

August figures show that both consumers and entrepreneurs have more confidence in the eurozone. Entrepreneurial confidence reached 101.8 in August compared to 101.1 in July. Consumer confidence reached -11 in August (-14 in July). The European Commission expected a consumer confidence of -11.7 and economists anticipated -12. According to the European Commission the increase in consumer confidence is the result of optimism about the general economic situation and a decline in concerns about unemployment.

Yesterday Japan announced to take further steps to stimulate domestic demand. The stimulus package totals JPY 920 billion (EUR 8.5 billion). The Japanese economy is suffering from persistent deflation. Simultaneously the Japanese yen appreciates against the euro and the US dollar. Last week the yen reached its highest level against the US dollar in fifteen years.

The Dow Jones started the week with a loss. The index closed the first trading day with a loss of 1.4% at 10,009.73 points. Part of the negative sentiment was caused by disappointing figures on US domestic income. Gross income increased slightly by 0.2% in July compared to June, but this was less than the 0.3% increase that economists expected.

The 6M Euribor remains unchanged at 1.14%. The 10Y Swap decreases with 8 basis points to 2.31%.

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, August 30, 2010

In fear of the eurozone's withstand to the Global slowdown, this week the European Central Bank is expected to extend emergency support for eurozone banks until early next year. Even though eurozone growth is exceeding all expectations of the European Central Bank, the treat raising from the member countries suffering the most this year's crisis over public finances has enforced the central bank's cautious attitude.

Investors are preparing for a week of crucial economic data which might determine the Federal Reserve's next steps. Attention will mainly focus on latest US employment figures. Continuous raise of unemployment is one of the possible triggers for the Fed to continue with quantitative easing by purchasing billions of dollars of long term assets such as Treasury bonds in effort to stimulate the economy.

The 6M Euribor remained unchanged at 1.14%. The 10Y Swap increased with 4 basis points to 2.39%.

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Friday, August 27, 2010

Continuing worries on global economic recovery and the revision of the American gross domestic product on Friday, dropped the Dow Jones below the 10.000 points. Initially the sentiment on the American stock markets was positive resulting from figures showing intitial jobless claims had fallen more than expected.

The AEX closed higher as a result of better than expected company results for, among others, TenCate and BAM on Thursday. Besides company results, an increasing figure on Dutch producer's confidence (from -2.4 in July to 0.4 in August) gave a further boost to the performance of the AEX. The AEX closed 0.8% higher at 314.

Stock markets turn more positive (after a sharp downturn in the beginning of this week), as a result of an increase in German consumer confidence figures. The euro advancing against the US dollar becomes more evident. The euro rose 0.5% to USD 1.2727 against the US dollar.

The 6M Euribor remained unchanged at 1.14%. The 10Y Swap decreased with 3 basis points to 2.35%.

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Thursday, August 26, 2010

After the sharp decline in interest rates yesterday, capital markets seem to have stabilized for the moment. The 10Y swap is unchanged from yesterday and short term interest rates are stable.

The euro declined versus the dollar and yen. According to analysts this decline is caused by continuing uncertainty about the credit worthiness of some peripheral euro zone countries. One example of this is the downgrade of Ireland’s rating by Standard & Poor’s.

Aside from the 27% decline in existing home sales in the United States, which was announced yesterday, new home sales also declined in July. Compared to June, home sales declined by 12.4%.
Orders for durable goods in the United States were disappointing. Analysts expected a rise of 3.0% from June to July but realized growth was 0.3%.
According to analysts these figures are an indication that a double dip is becoming more likely in the near future.

The 6M Euribor remains unchanged at 1.14% as is the 10Y swap at 2.38%.

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, August 25, 2010

The figure on existing home sales in the United States was 27% lower in July compared to the previous month. A total of 3.83 million existing homes were sold. Economists expected a number of existing home sales of over four million.

The disappointing figure on existing home sales amid growing fears for a second recession among investors, sent investors piling into the safety of government debt on Tuesday. As a result the 10-year American Treasury yield fell below 2.5% for the first time in seventeen months. The yield on 10-year German sovereign debt reached its lowest point ever at 2.19% on Tuesday. The 10-year swap dropped ten basis points to 2.38%.

The turmoil over the global economic recovery has resulted in an appreciation of the Japanese yen against the US dollar and the euro. Tuesday, the euro quoted 106.50 against the Japanese yen, an increase of 1.2% compared to Monday and the highest level since 2001.

The 6M Euribor remained unchanged at 1.14%. The 10Y Swap decreased with 10 basis points to 2.38%.

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