Market Information Friday 7 November 2025

The European Central Bank (ECB), as stated by Vice President Luis de Guindos, is content with the current interest rate level and views any inflation drop below 2% as temporary. Despite inflation surpassing the 2% target this year, it is expected to fall below this level next year. Investors see a modest chance for further policy easing, with interest rate cuts by mid-2026 possible. Positive inflation news and solid growth figures bolster the ECB’s confidence in their projections, and policymakers are now slightly more optimistic about the eurozone’s growth prospects.

In October, the U.S. economy saw job losses, particularly in government and retail sectors, amid a surge in layoffs prompted by cost-cutting and AI adoption. The Chicago Federal Reserve estimated an increase in the unemployment rate, but accurate labor market assessments are hindered by the ongoing government shutdown. Revelio Labs indicated significant job losses in government and moderate gains in education and health services. Layoffs increased by 37%, led by the tech sector, with companies like Amazon planning large cuts. Although planned layoffs are high, actual layoffs remained lower until mid-September. Cost-cutting was the primary reason for October’s job reductions, with AI being the second leading factor. Hiring intentions rose for holiday recruitment but remained below last year’s levels. This environment reflects high interest rates, tariff uncertainty, and rising costs impacting hiring decisions.

After advancing earlier in the week, European stocks declined on renewed tech and tariff concerns impacting firms like Legrand. The British pound regained ground as the BoE maintained its rate at 4% amid persistent inflation worries. Asian markets exhibited solid gains driven by tech stocks, yet concerns re-emerged in Europe. A narrow BoE vote kept hopes of a rate cut alive, lifting sterling slightly. Bond yields saw slight changes, while U.S. Treasury yields remained high. Positive U.S. services and employment data are decreasing chances of a December Fed rate cut, influencing market volatility.

The 6M Euribor is unchanged at 2.13% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.67% 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.