Market Information Thursday 9 January 2025

China’s currency, the renminbi, dropped to a 16-month low due to concerns over Trump’s potential tariffs and strong US economic data boosting the dollar. Traders anticipate the People’s Bank of China (PBoC) may further weaken the currency to counteract the impact of these tariffs on exports. The PBoC is managing exchange rate pressures while awaiting more information on US trade policies, amid broader economic challenges and global dollar strength.

UK 10-year borrowing costs hit their highest since 2008, as a bond sell-off complicates the Labour government’s budget rules and fiscal flexibility. The rise in gilt yields and a significant drop in sterling highlight investor worries about the UK’s borrowing needs, stagnant growth, and inflation. Chancellor Rachel Reeves may need to take corrective measures like spending cuts, particularly with upcoming fiscal forecasts and potential growth revisions by the Office for Budget Responsibility.

Germany is urging the EU to ease sanctions on Syria in exchange for reforms from its new leadership to support political transition and reconstruction. Proposals include lifting penalties if Syria implements reforms on social issues and protections for minorities, targeting leverage over Ahmed al-Sharaa. These changes, focusing also on easing banking and energy restrictions, are pending discussion among EU foreign ministers, with the support from all member states still uncertain.The 6M Euribor increased with 4 basis points to 2.63% compared to previous business day.

The 10Y Swap increased with 5 basis points to 2.52% 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.