Market Information Wednesday 10 December 2025

Investors are increasingly betting that interest rates in the Eurozone, Canada and Australia could increase next year, even as the US Federal Reserve is expected to continue cutting rates, a divergence that may further weaken the dollar. Swap markets now imply a small Eurozone rate increase by end-2026, reversing earlier expectations of cuts, while hawkish signals from central banks and stronger economic data have lifted global bond yields. The Fed is anticipated to make at least two more cuts next year, while the Bank of England is nearing the end of its easing cycle. This shift, driven by resilient growth and inflation pockets, suggests a turning point for global monetary policy and could keep downward pressure on the dollar.

German exports in October rose slightly by 0.1% to €131.3 billion, driven by stronger trade with European countries despite declines of exports to the US and China. Imports fell 1.2% to €114.5 billion, leaving a trade surplus of €16.9 billion. Analysts warn exports remain under pressure from weak Chinese demand, rising competition, and geopolitical factors. Meanwhile, factory orders and overall production grew modestly in October, supported by transport, construction, and machinery sectors, though car output lags. Economic forecasts remain cautious, with growth in 2026 expected to stay below 1% amid concerns over bureaucracy, labour costs, and global competition.

EU member states and the European Parliament have agreed to significantly weaken the proposed anti-look-away law, which will now apply only to companies with at least 5,000 employees and €1.5 billion turnover, compared to the original threshold of 1,000 employees and €450 million. The maximum fine for non-compliance has been reduced from 5% to 3% of global turnover, and obligations such as climate plans and full supply chain checks have been scaled back to focus only on highest-risk links. Implementation is postponed until July 2029, and there will be no EU liability regime for victims. The sustainability reporting directive is also eased, raising the turnover threshold to €450 million while keeping the employee limit at 1,000.

The 6M Euribor is unchanged at 2.15% compared to previous business day. The 10Y Swap is unchanged at 2.90% 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.