Market Information Monday 30 March 2020

Market Information Monday 30 March 2020

According to ING’s investor barometer, the corona crisis has caused Dutch investors’ confidence to fall to its lowest point since November 2012. In almost a month, the barometer fell from 127 to 82 points. At the beginning of March, the average investor expected the AEX at 527 points in June. Two weeks later, the average expectation dropped to 432 points. About 20 percent even expect a score below 425 points.

According to José Ángel Gurría, secretary general of the Organization for Economic Cooperation and Development, each month major economies are in a lockdown, will cause a decline of about 2 percentage points on their annual economic growth. According to Ángel Gurría, many economies are going through a recession and governments should not shun far-reaching crisis measures.

Due to the substantial support package to fight the corona pandemic and the uncertainty about the future trade relationship with the European Union, credit rating agency Fitch has lowered the rating for the United Kingdom from AA to AA-.

The 6M Euribor increased with 3 basis points to -0.27% compared to previous business day. The 10Y Swap decreased with 8 basis points to -0.02% 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 27 March 2020

Market Information Friday 27 March 2020

The CPB reported on Thursday that in a worst-case scenario, the Dutch economy will decrease by 7.7 percent as a result of the corona virus. In this scenario, the current restrictions last for six months or more. In the worst case, unemployment will rise to 8.4 percent in 2021, compared to 2.9 percent in February 2020. In the most positive scenario, where the current constraints last three months, the economy will shrink by 1.2 percent and unemployment will rise to 4.0 percent.

New figures from Insee, the national statistics office in France, show that French business confidence fell to 95 points in March, from 105 points in February. Insee further reports that economic production decreased by about a third in March. Consumer spending is also at 65 percent of the normal level.

The Bank of England has decided not to cut interest rates any further. On March 11 and March 19, the UK central bank already cut interest rates by 50 and 15 basis points respectively, to 0.1 percent. In addition, the previously announced 200 billion pounds buy-back program remains unchanged.

The 6M Euribor increased with 1 basis point to -0.30% compared to previous business day. The 10Y Swap decreased with 6 basis points to 0.06% 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 26 March 2020

Market Information Thursday 26 March 2020

According to Bloomberg, European authorities are considering several measures to assist banks dealing with potential bad loans as a result of the coronavirus. One option under review is to temporarily suspend a portion of accounting rules known as IFRS9. Another possibility under consideration is the extension of a transition period that was agreed before 2018. In short, this implies that banks get more time to comply with capital demands, without cutting dividends to shareholders. EU officials will further discuss the different options this week.

The volume of world trade decreased by 1.2% in January 2020 in comparison to December 2019. This is shown by figures from the Dutch bureau for Economic Policy Analysis (CPB) in the monthly World Trade Monitor. In December the world trade increased, with a revised 0.4%. The CPB emphasizes that the monitor does not show the current situation, but the situation of two months ago. In January, the spread of the coronavirus was still limited and the consequences of the coronavirus unknown.

Fed-president James Bullard of the central bank in St. Louis anticipates millions of unemployed by the coronavirus. Measures to control the spread of the coronavirus in the United States could put up to 46 million Americans out of work in the short term. According to Bullard, the economic shock in the US will be short if policymakers quickly come up with emergency economic aid, such as income support. Earlier this week an agreement was reached in the US on a comprehensive support package.

The 6M Euribor is unchanged at -0.31% compared to previous business day. The 10Y Swap increased with 4 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 Wednesday 25 March 2020

Market Information Wednesday 25 March 2020

According to market researcher Markit, the economy of the United States and the eurozone have been severely affected by the corona crisis. The Markit composite output index that measures activity for the US industry decreased to 40.5 in March compared to 49.6 in February. The index in the eurozone decreased to 31.4 in March, compared to 51.6 in February.

The governments and central banks of the G7 pledge at all costs to protect the global economy from the negative effects of the new coronavirus. The focus is on fiscal measures such as supporting affected companies and entrepreneurs and promoting liquidity in the financial system. According to the G7, the global economy has become more resilient to shocks compared to the previous financial crisis in 2008.

The U.S. Department of Commerce reported that sales of new homes in the United States decreased by 4.4% on a monthly basis in February. Economists expected a decrease of 1.8%. In January, sales increased by 10.5%.

The 6M Euribor is unchanged at -0.31% compared to previous business day. The 10Y Swap increased with 5 basis points to 0.08% 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 24 March 2020

Market Information Tuesday 24 March 2020

Figures published by Jibun Bank show that the Japanese services sector is impacted severely by the corona crisis. The purchasing managers index for the services sector fell from 46.8 in February 2020 to 32.7 in March 2020. This is the lowest level ever reported. For industry, the purchasing managers index fell from 47.8 in February to 44.8 in March 2020. The composite index of the services sector and industry was reported at 35.8.

In the US, Democratic senators have voted down a sizeable stimulus package for the US economy for the second time in a row. The plans, which are estimated to cost the US government approximately USD 2,000 billion, are said to focus too much on assisting businesses affected by the virus outbreak and too little on supporting families, hospitals and medical personnel. Tonight, a revised version of the support package will be scheduled for another vote.

International Monetary Fund chief Kristalina Georgieva said in a speech that the IMF fears that the corona crisis will cause a recession “at least as severe as the 2008 financial crisis, or worse.” According to the IMF, it is important that countries work together as much as possible to protect their populations and to minimize the economic damage caused by the virus outbreak. The IMF has pledged to arrange approximately USD 1,000 billion in loans to support countries in need.

The 6M Euribor increased with 4 basis points to -0.31% compared to previous business day. The 10Y Swap decreased with 4 basis points to 0.03% 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.