Market Information Wednesday 20 December 2023

On Tuesday, eurozone bond yields declined, reversing the previous day’s increase, as investors anticipated the possibility of significant interest rate cuts by the European Central Bank next year. Germany’s 10-year yield was last down by 7 basis points (bps) at 2.01%. This was just above the nine-month low reached the day before, before ultimately rising by 6 bps.

In November, inflation in the eurozone further decreased, as indicated by a preliminary estimate in the definitive figures released by Eurostat on Tuesday. Consumer prices rose by 2.4% last month, as previously reported. In October, this figure stood at 2.9%. The core inflation rate, a crucial gauge for the European Central Bank (ECB), was 3.6% on a yearly basis in November, compared to 4.2% a month earlier. This measure excludes the volatile prices of energy, food, alcohol, and tobacco. On a monthly basis, consumer prices in the eurozone declined by 0.6% in November, slightly more than the expected decrease of 0.5%.

The European Union announced on Tuesday morning that it will not impose import duties on the import of American steel and aluminum until March 31, 2025. This decision was made public by the European Commission. The previously imposed import duties by the EU during Donald Trump’s presidency were in response to the tariffs imposed by Washington on European steel and aluminum. In 2022, Brussels suspended these duties until the end of 2023, and it has now been decided to extend this suspension until March 31, 2025. In exchange, Washington is waiving certain quotas on steel and aluminum from Europe. The 6M Euribor decreased with 1 basis point to 3.90% compared to previous business day. The 10Y Swap decreased with 6 basis points to 2.49% 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.