Market Information Wednesday 29 May 2024

In May UK shop price inflation slowed to its lowest rate in two and a half years, indicating that the pace of price increases in British retail is returning to normal levels, with food inflation also continuing its downward trend for the thirteenth consecutive month. This easing of inflationary pressures, welcomed by the Bank of England, suggests potential for future interest rate cuts as services sector prices remain the focus due to their higher inflation compared to goods.

In April, Japan’s corporate services prices surged at the fastest rate since March 2015, driven by rising labor costs in services industries, marking a significant development for policymakers who are keen on initiating a wage-led demand growth cycle. The Corporate Services Price Index increased by 2.8% year-on-year, with the Bank of Japan considering further rate hikes as part of its shift away from negative interest rates.

The Bank of Israel maintained its benchmark interest rate at 4.50%, citing increasing inflation pressures and ongoing geopolitical uncertainties due to the conflict with Hamas in Gaza. The central bank highlighted that any future rate cuts would be cautious, acknowledging challenges in normalizing interest rates while aiming to stabilize the markets and support economic growth amid heightened risks.

The 6M Euribor is unchanged at 3.78% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.84% 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.