Market Information Friday 10 October 2025

Direct lending, praised for high returns and low default rates, is facing scrutiny following the collapse of auto supplier First Brands Group. Despite the supposed close relationships lenders have with borrowers, lenders like UBS and BlackRock suffered significant losses due to a lack of understanding of the borrower’s true financial state. The sector, which grew rapidly post-financial crisis, has never faced a severe recession test. Tobias Adrian from the IMF warns of impending risks as private credit emerges among retail investors, potentially creating liquidity issues. U.S. banks have significantly increased lending to nonbank financial institutions, which could pose problems if defaults escalate.

The European Central Bank (ECB) policy is considered robust enough to manage changes in inflation outlooks, allowing it to maintain its current course until more clarity emerges, according to recent meeting notes. In September, the ECB kept interest rates steady, suggesting that further policy easing would require significant conditions despite ongoing U.S. tariff impacts. The likelihood of rate cuts this year has decreased, supported by positive data and comments from President Christine Lagarde. While significant downward risks remain, the ECB will continue to assess tariffs and other factors. Investors believe further easing may still be possible due to economic uncertainties in France and Germany.

The Dutch labour market is cooling, with fewer job changes, vacancies, and active job searches. Labour mobility is at a four-year low due to geopolitical tensions, trade wars, political uncertainty, and low consumer confidence. Intelligence Group notes increased reorganizations and reduced demand for highly educated starters due to artificial intelligence. U.S.-like labour market effects are expected to appear in the Netherlands within 12-18 months, with rising unemployment and lower wage growth. A new cabinet must prepare for increased social security expenditures.

The 6M Euribor decreased with 1 basis point to 2.10% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.69% 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.