Market Information Tuesday 31 October 2023

Japan’s central bank loosened its grip on market interest rates following its interest rate decision this morning. Market rates on 10-year government bonds were capped below 0.5% for years and below 1.0% since July. In doing so, the bank suggests that the 10-year interest may now move around 1%. With this move, the Bank of Japan is cautiously moving toward a normal policy. The Bank of Japan still maintains a negative interest rate of 0.1% as the only major central bank in the world. As a result of the Bank of Japan’s intervention to keep capital market interest rates low, the Yen has fallen sharply since early 2021.

Inflation in Germany fell to its lowest level since August 2021. German inflation fell to 3.0% in October, according to the Federal Statistical Office. German consumer prices were down 4.3% in September from a year earlier. Core inflation, which excludes volatile food and energy prices, fell to 4.3% in October from 4.6% in September. Inflation is expected to decline further in the first few months of the coming year.

According to figures published by Statistics Netherlands, the Netherlands experienced deflation in October. Depending on the definition, the price level was 1% or 0.4% lower than the same month a year ago, consumers spent 40% more on energy prices. The 1% deflation is measured according to the European definition (HCIP). According to the Dutch definition (CPI), deflation was 0.4%. Both numbers are quick estimates that can be adjusted over time.

The 6M Euribor decreased with 1 basis point to 4.10% compared to previous business day. The 10Y Swap decreased with 1 basis point to 3.36% 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.