Market Information Monday 30 June 2025

Central bankers are warning that household fears of future inflation remain high despite falling current inflation rates, potentially destabilizing inflation expectations. The Bank for International Settlements (BIS) highlights that households expect inflation around 8%—far above central bank targets—driven by lingering post-pandemic price shocks, trade tensions, and geopolitical risks. If these expectations lead to behavioral changes, like higher wage demands, central banks may need to respond quickly to prevent a lasting inflation spiral.

Investors are shifting focus from geopolitical tensions to upcoming U.S. economic data and policy developments, including a key employment report and a fiscal bill in Congress. The recent stock rally, driven by easing Middle East tensions and optimism about interest-rate cuts and trade deals, faces new tests as concerns over inflation, labor market weakness, and tariffs resurface. With corporate earnings season approaching, market attention is turning back to economic fundamentals.

Increased defence spending across Europe, driven by NATO’s new 5% GDP goal, could weaken countries’ credit ratings unless offset by spending cuts or higher revenues, according to ratings agency Scope. Countries with high deficits, like France, Belgium, and Italy, face the greatest fiscal pressure. Scope suggests that shifting more defence financing to the EU level could improve sustainability and efficiency through shared funding and procurement.

The 6M Euribor is unchanged at 2.04% compared to previous business day. The 10Y Swap increased with 2 basis points to 2.59% 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.