Market Information Friday 15 September 2023

The European Central Bank (ECB) has announced a quarter-point increase in interest rates, bringing the key deposit rate to 4%, in response to persistent inflation issues in the eurozone, where inflation has dropped from over 10% in October 2022 to 5.3%. While this rate hike was somewhat expected, ECB President Christine Lagarde emphasized that it is too early to say whether rates have peaked and that future changes will depend on evolving circumstances. The ECB has also lowered its economic growth forecasts, predicting 0.7% growth this year and 1.0% next year in the eurozone. In contrast, inflation forecasts for 2023 and 2024 have been revised upward. This marks the tenth interest rate increase in this cycle.

Machine orders in Japan continued to rise in July, as reported by government data on Thursday. Seasonally adjusted, machine orders increased by 9.8% month-on-month, following a slight 0.2% rise in June. However, in the private sector, excluding volatile orders, machine orders declined by 1.1% in July, contrasting with a 2.7% increase in June.

In August, producer prices in the United States rose more than expected, with a monthly increase of 0.7%, while economists expected a rise of 0.4%. Excluding the impact of volatile trade, food, and energy prices there was a 0.3% increase in August, in line with July. On an annual basis, the increase in producer prices in August rose to 1.6%, compared to 0.8% a month earlier. Core prices in August saw a 3.0% increase, compared to the 2.9% rise in July. The 6M Euribor increased with 3 basis points to 4.00% compared to previous business day. The 10Y Swap decreased with 5 basis points to 3.14% 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.