Market Information Monday 26 February 2024

Bundesbank President Joachim Nagel warns that it is still too early for an interest rate cut, considering the core inflation of 3.3% in January and unclear price outlooks. Despite the record loss of €19.2 billion in 2023, Nagel emphasizes that a capital injection is not necessary, and that the Bundesbank has a solid balance sheet with a silent reserve of nearly €200 billion, primarily in gold.

New York Federal Reserve President John Williams foresees a rate cut “later this year” despite robust January data, emphasizing the need for sustained signs of inflation moving toward the 2% target. Williams also underscores the importance of a smooth process in discussions about slowing the ongoing reductions to the Fed’s balance sheet to prevent market disruptions.

The European gas price reached its lowest level since May 2021, dropping below 23 euros per megawatt-hour on the Amsterdam Gas Exchange. After tensions with Russia, uncertainties surrounding Nord Stream 2 in 2021, and a peak in August 2022 at around 340 euros per megawatt-hour, the gas price has significantly decreased due to alternative fuels, strategic replenishment of gas storages, and mild winters.

The 6M Euribor is unchanged at 3.91% compared to previous business day. The 10Y Swap decreased with 8 basis points to 2.70% 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.