Market Information Friday 29 May 2020

Market Information Friday 29 May 2020

The second estimate by the US Department of Commerce shows that the US economy contracted by 5.0 percent in the first quarter of 2020 compared to the fourth quarter of 2019. The first estimate showed a contraction of 4.8 percent. In the fourth quarter of 2019, the US economy grew by 2.1 percent compared to the third quarter of 2019.

New figures from Statistics Netherlands show that prices in the Dutch industry decreased by 8.2 percent in April 2020 compared to April 2019. In March 2020, prices for industrial products were 3.8 percent lower compared to March 2019. On a monthly basis, prices in the industry fell by 3.1 percent in April 2020, compared to March 2020. This decrease is mainly caused by falling prices of crude oil.

According to figures released by the Japanese government on Friday, Japanese consumer confidence index increased to 24.0 in May 2020, from 21.6 in April 2020. In addition, the Japanese Ministry of Trade and Industry published new figures showing that industrial production decreased by 9.1 percent in April 2020 compared to March 2020. On an annual basis, production in the Japanese industry decreased by 14.4 percent in April 2020 compared to April 2019.

The 6M Euribor decreased with 2 basis points to -0.15% compared to previous business day. The 10Y Swap is unchanged at -0.11% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Thursday 28 May 2020

Market Information Thursday 28 May 2020

According to President of the European Central Bank (ECB) Christine Lagarde, the eurozone economy is expected to contract more sharply in 2020 than previously assumed. As a result of the corona crisis, the ECB now anticipates a contraction of between 8% and 12%, while it previously assumed that the economy would contract between 5% and 12%. According to Lagarde, the scenario currently used for projections is a “medium to heavy” scenario. Next week, the ECB will release new forecasts for economic growth and inflation in the eurozone.

Statistics Netherlands (CBS) has reported that producer confidence rebounded slightly in May 2020, from an all-time low in April 2020. The index measuring confidence rose to -25.1 in May, from -28.7 in April. This was the lowest point ever recorded. The greatest improvement was recorded in the expectation of economic activity in the next twelve months. Opinions on inventory of finished products also improved in May. Looking at the individual sectors, the greatest increase in producer confidence was observed in the transport industry, while producer confidence in the food and beverage industry decreased.

In the Beige Book, the Federal Reserve’s report on economic activity in the United States, is stated that the corona crisis continues to have a very negative impact on the US economy. The prospects for an economic recovery are also very uncertain. Moreover, due to high unemployment in the US, economic recovery will be slower than previously assumed.

The 6M Euribor increased with 2 basis points to -0.13% compared to previous business day. The 10Y Swap is unchanged at -0.11% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Wednesday 27 May 2020

Market Information Wednesday 27 May 2020

The US consumer confidence index rose 0.9 points to 86.6 in May, according to the Conference Board report released Tuesday. The sub-index of expectations, based on consumers’ short-term outlook for income, business and labor market conditions, increased for the second consecutive month to a reading of 96.9 in May from 93.8 in April.

Federal Reserve Bank of St. Louis President, James Bullard, predicted that the US economy will recover quickly and that the jobless rate will drop below 10 percent by December. He also mentioned that “the third quarter very likely, right behind the worst quarter, will be the best quarter of all time on the growth perspective”. His expectations are more optimistic than the majority of Wall Street. Economists surveyed by Bloomberg expect unemployment to be 10.3% in the fourth quarter of 2020.

The European Central Bank is preparing contingency plans in case the Bundesbank is excluded from participating in the purchase program according to news agency Reuters on Tuesday based on anonymous sources. About a quarter of the purchased government bonds under the PSPP are Bunds. The German central bank has received an ultimatum from the German Bundesverfassungsgericht to justify the purchase program.

The 6M Euribor is unchanged at -0.15% compared to previous business day. The 10Y Swap increased with 3 basis points to -0.11% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Tuesday 26 May 2020

Market Information Tuesday 26 May 2020

Russia is stopping imports of oil products until October. The strict measures to control the coronavirus resulted in a collapse in oil demand resulting in very low prices for various fuels such as petrol and diesel. An import ban should prevent cheap oil from abroad from entering the Russian market in the coming months. Belarus is one of the largest exporters of gasoline to Russia. The neighbouring country produces three times as much petrol as needed for its own consumption and sends about 2000 tons of petrol to Russia every year.

Next month, the European Central Bank (ECB) will most likely expand its bond repurchase programme to provide additional support to the eurozone economy during the corona crisis. Now that inflation is low, there is room to innovate and “act rapidly and powerfully”, Francois Villeroy de Galhau said. He is the governor of the French central bank and also one of the main policy makers at the ECB. At the time of the previous interest rate decision at the end of April, the ECB did not yet extend the emergency repurchase programme, but stated that it would be ready to expand or extend the EUR 750 billion programme.

World trade was 1.4% lower in March than in February under pressure from the corona crisis, reports the Netherlands Bureau for Economic Policy Analysis (CPB). This drop is scarcely bigger than in January and February, when world trade also fell by an average of 1.2%. For April and May, the CPB foresees an overall sharper decline in world trade and production, in line with the tightening up of corona measures in many regions.

The 6M Euribor is unchanged at -0.15% compared to previous business day. The 10Y Swap is unchanged at -0.14% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Monday 25 May 2020

Market Information Monday 25 May 2020

The Netherlands, Austria, Sweden, and Denmark, known collectively as “the thrifty four” of the European Union, announced their plan for the EU’s recovery fund on Saturday. In a so-called non-paper, the above countries announced that the fund should consist of loans on favourable terms rather than gifts. Member States have been discussing the terms and conditions of this fund, intended for southern European countries that are hit hard by the corona crisis for weeks. France and Germany previously proposed that the fund should consist of gifts.

The Japanese government is considering a new aid package worth ¥ 100,000 billion (€ 852 billion) to support the declining economy. The money will mainly help companies that have a hard time because of the coronavirus outbreak, reports the Japanese newspaper Nikkei. The coronavirus outbreak is pushing Japan’s economy into the deepest recession after World War II. Analysts expect the Japanese economy to decline by 22% in the second quarter of 2020.

China will continue to drastically limit international air traffic in passenger transport until at least mid-October. The US government wants China to be much more flexible and threatens to take steps against Chinese airlines. In addition, China has announced that it does not intend to return to a planned economy. President Xi Jinping announced this Saturday in response to US criticism that China has failed to implement promised reforms.

The 6M Euribor decreased with 1 basis point to -0.15% compared to previous business day. The 10Y Swap is unchanged at -0.14% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Wednesday 20 May 2020

Market Information Wednesday 20 May 2020

The indicator for the economic climate in Germany shows a further recovery in May, according to the ZEW institute. The index increased to a level of 51 in May from 28.2 in April. The indicator is higher than economists expected. They expected a reading of 32. For the entire euro area, the indicator has risen by 20.8 points to a score of 46 against 25.2 in April.

In the first quarter of 2020, the turnover for the Dutch industrial sector is 2.7 % lower than in 2019, according to Statistics Netherlands (CBS) based on new figures. Domestic sales in the first quarter were nearly the same as sales of a year earlier. Foreign sales of industrial producers are 4.2 % lower. In most business sectors, sales were lower than a year earlier. The largest negative developments in turnover can be seen in the transport equipment industry, the paper and graphics industry and the refineries and chemicals.

Federal Reserve Chairman Jerome Powell attended a virtual hearing about the stimulus measures on Tuesday together with U.S. Treasury Secretary Steven Mnuchin. At the hearing, Powell told the United States Senate that the Federal Reserve is ready to use the full range of tools to support the economy during the pandemic. Mnuchin expressed his expectations for an economic recovery in the second half of this year, while Powell was more reluctant in his expectations, expecting a full recovery only by the end of 2021.

The 6M Euribor decreased with 1 basis point to -0.14% compared to previous business day. The 10Y Swap increased with 1 basis points to -0.12% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Tuesday 19 May 2020

Market Information Tuesday 19 May 2020

The first phase of an an experimental corona vaccine yielded hopeful results. Pharmacist Moderna reported that all 45 subjects participating in the Phase 1 study developed antibodies that could ‘neutralise’ the virus. The vaccine, called mRNA-1273, is also relatively safe and caused minor side effects, according to the pharmacist. The next phase of the trial is expected to start in July. If the vaccine eventually proves itself useful, it can get approval from the U.S. health authorities relatively quickly.

These promising test results and the easing of corona measures in many countries created optimism among investors and spurred hopes of an economic recovery in the second half of the year. The AEX index closed 3.9% higher at 519.89 points. The stock exchanges in London, Paris and Frankfurt have also increased substantially. In the US, the Dow-Jones index closed 3.9% higher, the S&P 500 rose 3.2% and the Nasdaq won 2.4%.

Market doubts about validity of the European Central Bank’s (ECB’s) buy-back programme caused the central bank repurchase more, which could already lead to an early termination of the programme, according to chief economist Gilles Moëc of asset manager and insurer AXA Group. Moëc refers to the “vicious circle” in which the ECB is trapped. Moëc estimates that at the current pace the ECB will reach the limit of its EUR 750 billion Pandemic Emergency Purchase Programme (PEPP) before the end of the summer.

The 6M Euribor increased with 1 basis point to -0.13% compared to previous business day. The 10Y Swap increased with 3 basis points to -0.13% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Monday 18 May 2020

Market Information Monday 18 May 2020

Research published by the European statistics agency Eurostat shows that the eurozone economy declined by 3.8 percent in the first quarter of this year, the strongest decline since the beginning of the measurements. For the entire European Union, a shrinkage of 3.3 percent was recorded this quarter. Eurostat further reported that employment in the eurozone fell by 0.2 percent in the first quarter compared to the previous period. That is the first time the employment in the eurozone declined since 2013.

Factories in the United States produced 13.7 percent less in April than a month earlier. It is the sharpest decline since the Federal Reserve started to keep records (1919). Many factories were forced to close or decrease their production. Several states allowed only vital production as part of their lockdown measures against the coronavirus. At the same time, US producers were experiencing a sharp decline in export demand and logistical problems.

Consumer confidence in the US has risen unexpectedly, according to the University of Michigan. A preliminary estimate of the index for May shows a level of 73.7, compared to a level of 71.8 in April. In April, consumer confidence has shown a sharp decline. Economists had expected an average level of 68 for May.

The 6M Euribor is unchanged at -0.14% compared to previous business day. The 10Y Swap is unchanged at -0.16% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Friday 15 May 2020

Market Information Friday 15 May 2020

New figures from the US Department of Labor show that import prices in the United States decreased by 2.6 percent in April 2020 compared to March 2020. Economists had anticipated a 3.0 percent decline. The decrease is mainly due to lower import prices for fuel. Export prices in the United States decreased by 3.3 percent in April 2020 compared to March 2020.

Statistics Netherlands reports that business confidence in the Netherlands decreased to -37.2 in the second quarter of 2020, from 6.4 in the first quarter of 2020. This is the strongest decline in business confidence since the start of the current series of measurements. In addition, the index for business confidence has never been this low.

Industrial production in China increased by 3.9 percent in April 2020 compared to April 2019. In March 2020, production decreased by 1.1 percent from March 2019. Economists had expected an increase of 1.0 percent for April 2020. On a monthly basis, production increased by 2.3 percent in April 2020 compared to March 2020.

The 6M Euribor increased with 1 basis point to -0.14% compared to previous business day. The 10Y Swap decreased with 1 basis point to -0.16% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Thursday 14 May 2020

Market Information Thursday 14 May 2020

President of the Federal Reserve stated in a speech that the corona crisis may cause lasting damage to the US economy. According to Powell, the economic outlook is extremely uncertain as the unemployment rate and bankruptcy rates have risen to high levels in recent months. Powell further emphasized that the Fed wants to stay away from negative interest rates, but that further fiscal support would help prevent long-term economic damage.

Eurostat figures show that eurozone industrial production fell sharply in March 2020. Production declined by 11.3% on a monthly basis as a result of the corona crisis. In February 2020, industrial production in euro countries declined by a revised 0.1%.

The German federal statistical office Destatis has published final figures that show that inflation in Germany in April 2020 was 0.9% year-on-year. Inflation was therefore slightly above the provisional figure of 0.8%. In March 2020, inflation was at 1.4%. Based on the European harmonized measuring method, German inflation in April 2020 was 0.8%.

The 6M Euribor is unchanged at -0.15% compared to previous business day. The 10Y Swap decreased with 1 basis point to -0.15% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Wednesday 13 May 2020

Market Information Wednesday 13 May 2020

The U.S. Bureau of Labor Statistics published figures on Tuesday that show the key measure of U.S consumer prices declined in April. The core consumer-price index (CPI), excluding volatile food and fuel costs, decreased 0.4% compared to March. This is the largest drop since 1957. Compared with April 2019, core CPI rose 1.4%, the smallest annual increase since 2011. The overall CPI declined 0.8% in April compared to overall CPI in March. 

The National Bureau of Statistics reported on Tuesday that China’s producer price index declined 3.1% in April versus a forecasted 2.6% decline. The consumer price index increased with 3.3% in April while a 3.7% increase was forecasted. Core inflation slowed to 1.1% from a year earlier.

The U.K. economy declined almost 5.8% in March due to the lockdown according to the Office of National Statistics. Consumer spending dropped 1.7% in the first quarter, the largest drop since the financial crisis. A report by the British Retail Consortium on Wednesday showed that consumer spending has also declined even further in recent weeks with sales declining with 19.1% in April from a year earlier.

The 6M Euribor is unchanged at -0.15% compared to previous business day. The 10Y Swap decreased with 2 basis points to -0.14% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Tuesday 12 mei 2020

Market Information Tuesday 12 mei 2020

In the Netherlands, prices paid by consumers for goods or services increased less in April than a month earlier. This is mainly caused by low oil prices, according to Statistics Netherlands (CBS). Consumer prices increased by 1.2% year-on-year in April. In March, the increase was 1.4%.

Within the Chinese government some officials are calling for a renegotiation of the earlier trade deal with the United States. Important Chinese advisors would already press for new negotiations with the Americans to force better conditions for China, according to the Chinese newspaper Global Times on the basis of insiders. The so-called Phase 1 deal provisionally ended the trade war between the major economic powers in January. US President Donald Trump recently put relations with China on the line with remarks that he would have evidence that the new coronavirus originated in a laboratory in the Chinese city of Wuhan, where the virus first broke out. China has denied those accusations.

The number of bankruptcies in April has increased compared to the previous month. Adjusted for the number of session days, 75 more companies were declared bankrupt last month than in March, Statistics Netherlands reports. April is the first full month in which measures against the coronavirus were in place. However, according to Statistics Netherlands, the effects of the lockdown, which forced all restaurants and cafés to close down, are not or hardly visible yet. In the first four months of 2020, the number of bankruptcies was more than 3% higher than in the same period last year.

The 6M Euribor decreased with 4 basis points to -0.15% compared to previous business day. The 10Y Swap is unchanged at -0.12% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Monday 11 May 2020

Market Information Monday 11 May 2020

The finance ministers of the nineteen euro countries agreed on Friday on the exact conditions under which their governments can turn to the European emergency fund ESM for funding. Countries are allowed to borrow up to 2% of their gross domestic product (GDP) from the ESM for ‘direct and indirect healthcare costs’ as a result of the corona pandemic. Normally, there are strict conditions for receiving the cheap credit from the emergency fund. However, the Eurogroup has decided not to impose such conditions this time because this is a health crisis and not financial mismanagement.

The official job report from the United States Department of labour shows that unemployment rose to 14.7 percent in April. This is the highest level since the Great Depression in the 1930s. Twenty million jobs were lost in April. According to finance minister Steven Mnuchin and a high-ranking advisor to Donald Trump, the US will have to prepare for an unemployment level of perhaps 25%.

Wholesale stocks in the United States fell 0.8 percent in March compared to the previous month, according to the United States Department of Commerce. A one percent decrease was reported in a preliminary estimate.

The 6M Euribor increased with 3 basis points to -0.11% compared to previous business day. The 10Y Swap increased with 2 basis points to -0.12% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Friday 8 May 2020

Market Information Friday 8 May 2020

The central bank of Norway, Norges Bank, decreased its most important interest rate by 25 basis points to 0 percent on Thursday. This is the third interest rate cut by Norges Bank in two months. Analysts expected the interest rate policy to remain unchanged. In addition, the central bank predicts a 5.2% contraction of the Norwegian economy over 2020 as a result of the corona crisis and the continuing pressure on oil prices. Around mid-March, Norges Bank predicted a small growth of the Norwegian economy of 0.4% over 2020.

Figures published by the US Department of Labor on Thursday show that 3.2 million Americans have claimed social assistance benefits in the past week. That is a decrease compared to last week, when the number of unemployed increased by 3.9 million. Economists expected 3.0 million new unemployed. Since the beginning of the corona crisis, approximately 33.5 million Americans have now claimed social assistance benefits.

New figures published by Statistics Netherlands on Friday show that industrial production in the Netherlands decreased by 2.5 percent in March 2020 compared to March 2019. In February 2020, industrial production shrank by 1.3 percent compared to February 2019. On a monthly basis, production decreased by 1.0 percent in March 2020 compared to February 2020.

The 6M Euribor increased with 3 basis points to -0.14% compared to previous business day. The 10Y Swap decreased with 3 basis points to -0.14% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Thursday 7 May 2020

Market Information Thursday 7 May 2020

The European Commission has published new economic growth estimates for 2020 and 2021. This shows that the economy of the 19 euro countries will contract by an average of 7.7% in 2020, while unemployment will rise to 9.6%. However, the European Commission expects European economies to recover in 2021, with an average growth of 6.3%. For the Netherlands, the European Commission expects a contraction of 6.8% in 2020, and a growth of 5.0% in 2021.

According to payroll processor ADP, employment in the United States fell sharply in April 2020. Many companies have closed their doors due to the corona crisis. The number of jobs shrank with 20.2 million in April. This is the biggest drop ever; the previous record was a decrease of 835,000 during the financial crisis in 2009. Approximately 80% of lost jobs derive from the services sector. The US government will publish its monthly jobs report this Friday. This report will also include figures of the American public sector.

China’s exports increased by 3.5% in April 2020 compared to April 2019. The rebound of exports was unexpected; economists expected a sharp decline. The growth was mainly driven by higher exports to countries in Southeast Asia. However, economists believe that the upturn is temporary and that the consequences of the corona crisis will lead to declining exports from China later this year.

The 6M Euribor decreased with 1 basis point to -0.17% compared to previous business day. The 10Y Swap increased with 4 basis points to -0.11% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Wednesday 6 May 2020

Market Information Wednesday 6 May 2020

On Tuesday, the German Constitutional Court (BVG) raised questions about the future of the European Central Bank’s monetary policy. In addition, the authority of the Court of Justice of the EU is called into question. The ruling states that the ECB must establish ‘reasonableness’ for the asset-purchase program within three months. If no action is taken, the German Bundesbank is not allowed to participate in the purchase program. The ECB responded to the ruling by pledging to continue doing everything necessary to revive inflation.

The U.S. Census Bureau reported that the US trade deficit widened to $ 44.4 billion in March as both exports and imports declined due to the impact of the corona virus. In February, the trade deficit was $ 39.8 billion. The reported trade deficit is in line with market expectations of a $ 44 billion gap. Exports declined in April with 9.6 percent to $ 187.7 billion and imports declined with 6.2 percent to $ 232.2 billion.

The Institute of Supply Management (ISM) published the Non-Manufacturing PMI for the United States in April. Economic activity declined in April for the first time since December 2009. The index fell from 52.5 in March to 41.8 in April, a decline of 10.7 points. The decrease was mainly due to a decline in the indices for business activities, new orders and employment. The only two industries that reported growth in April were Public Administration and Finance & Insurance.

The 6M Euribor increased with 1 basis point to -0.16% compared to previous business day. The 10Y Swap decreased with 1 basis point to -0.15% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Monday 4 May 2020

Market Information Monday 4 May 2020

The Federal Reserve continues to reduce the daily amount of government bonds purchases. The US central bank will buy $ 8 billion of debt securities today, instead of $ 10 billion. Last week, the daily amount was already reduced from $ 15 billion to $ 10 billion. The Fed has purchased more than $ 1,400 billion in government bonds in seven weeks.

Industrial activity in the United States and Japan fell sharply in April due to the consequences of the corona crisis, according to research agencies ISM and Markit. The index for the production in American factories fell by more than 20 points compared to March, to a level of 27.5. In Japan, the purchasing managers index fell to a level of 41.9.

The Netherlands imported € 8.7 billion worth of medical goods in the first quarter of 2020, 8% more than in the first quarter of 2019. In the same period, total imports of goods decreased by 3%. The Netherlands was the fifth largest importer of medical goods in the world in 2019, reports the Dutch Central Bureau of Statistics.

The 6M Euribor decreased with 1 basis point to -0.17% compared to previous business day. The 10Y Swap decreased with 7 basis points to -0.16% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Market Information Friday 1 May 2020

Market Information Friday 1 May 2020

The European Central Bank (ECB) eased monetary policy on Thursday by implementing two measures. First, the refinancing rate for banks (TLRO III) is further reduced to -1.0%. Second, the ECB is introducing a new lending program that will allow banks to register for emergency loans (PELTROs) seven times at a rate of -0.25% as of May 2020. This way, the ECB aims to create an effective reserve for liquidity in the eurozone. In addition, the ECB continues with the EUR 750 billion emergency buy-back program. Official interest rates remain unchanged.

Preliminary figures from Eurostat show that consumer prices in the eurozone increased by 0.4 percent in April 2020 compared to April 2019. In March 2020, consumer prices increased by 0.7 percent compared to March 2019. Core inflation, which is an important benchmark for the ECB, was 0.9 percent on an annual basis in April 2020. In March 2020, annual core inflation was 1.0 percent.

Eurostat also reports, based on preliminary figures, that the economy in the eurozone contracted sharply in the first quarter of 2020. Gross domestic product (GDP) decreased by 3.8 percent in the first quarter of 2020 compared to the fourth quarter of 2019. In the fourth quarter of 2019, GDP grew by 0.1 percent ten in the third quarter of 2019.

The 6M Euribor decreased with 1 basis point to -0.17% compared to previous business day. The 10Y Swap decreased with 7 basis points to -0.16% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.