Market information

Tuesday, January 19, 2010

Since November last year, the difference in return of corporate bonds over government bonds has been declining. According to some analysts, the decline will continue and the spread will further tighten. A given explanation is that a high supply is compensated by a even larger demand. Businesses and households have heavily saved during the crisis and that now flows into the bond market. The best days experienced corporate bonds in March last year. At that time, the risk of corporate bonds were considered very high and investors demand a substantial interest rate premium. The return on debt of financial institutions has also decreased considerably. In March 2009 it was still 8.88%, while last week it was 4.33%.

After a difficult start and a quiet trading day the AEX index closed at 339 points, a small gain of 0.3%. The rest of the week will be more exiting, when the major U.S. financial institutions will publish their quarterly results.

The 6M Euribor remained unchanged at 0.98% and the 10Y Swap decreased with 2 basis points to 3.45%.

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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