Oil prices rose again on Friday. Both the prices for a barrel of West Texas Intermediate and Brent increased by as much as 1%, resulting in the highest price levels in two months. On a weekly basis, prices increased by over 6%. Possible explanations for the increase include factors such as news about additional stimulus measures in China, unexpectedly large inventory declines, and ongoing tensions in the Middle East.
The financing of small businesses is under pressure, as indicated by the Financing Monitor of Statistics Netherlands (CBS). Despite a substantial need for funding in SMEs, these businesses struggle to navigate the path to financiers. A mere 42% sought financing last year, with 58% of micro-businesses abandoning their search prematurely, marking a 10% increase from 2022. While internal financing is common, it compromises financial resilience. Additionally, the share of bank financing has, for the first time, dropped below 50%, with over 40% opting for alternative sources like crowdfunding, leasing, and factoring companies.
German consumer confidence for February unexpectedly worsened, as revealed by measurements from research firm GfK, which conducts forward-looking assessments. The confidence index dropped to -29.7, compared to -25.4 the previous month, adjusted from an earlier forecast of -25.1.
The 6M Euribor decreased with 1 basis point to 3.91% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.68% 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.
The President of the European Central Bank, Christine Lagarde, stated that it is still too early for interest rate cuts. This statement was made on Thursday during an explanation of the decision to maintain the key interest rates. As a result, the base rate remains at 4.50%, the marginal lending facility at 4.75%, and the deposit facility at 4.00%.
The U.S. economy unexpectedly showed strong growth in the fourth quarter. According to preliminary figures published on Thursday by the Bureau of Economic Analysis, the increase compared to the previous year was 3.3%. Economists consulted by the Reuters news agency had anticipated a growth of 2.0%. Although economic growth is lower than the previous quarter, when the figure was 4.9%, it once again confirms that the U.S. economy continues to perform well, despite the interest rate hikes by the Federal Reserve last year.
The number of new applications for unemployment benefits in the United States for the week ending on January 20 increased significantly more than anticipated, according to Thursday’s data from the U.S. Department of Labor. The number of new claims for unemployment benefits rose by 25,000 to reach 214,000. Economists expected 199,000 applications.
The 6M Euribor decreased with 2 basis points to 3.92% compared to previous business day. The 10Y Swap decreased with 6 basis points to 2.67% 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.
Economic activity in the Eurozone showed a smaller contraction in January than in the previous month, according to preliminary data released on Wednesday. Although a decline was observed, the services sector index did not meet expectations with a score of 48.4, lower than the 48.8 in December. However, the purchasing managers index for manufacturing showed an unexpected rise from 44.4 to 46.6, while analysts had forecast a moderate improvement to just 44.8. This led to a slight increase in the composite index from 47.6 to 47.9, still just below the predicted 48.0.
In the United States, preliminary figures indicated recovery in the industrial sector and an acceleration in the service sector. The preliminary service sector index rose from 51.4 to 52.9, reaching the highest level in 7 months. The purchasing managers index for manufacturing improved from 47.9 to 50.3. Consequently, the composite purchasing managers index climbed from 50.9 in December to 52.3 this month.
A decrease in crude oil inventories by 9.2 million barrels was reported, which was a significantly higher decrease than the expected 1.4 million barrels decrease. Inventories stood at 420.7 million barrels at the end of last week. Gasoline inventories, however, rose by 4.9 million barrels, marking a greater increase than the forecasted 1.5 million barrels increase. Gasoline inventories stood at 253.0 million barrels at the end of last week.
The 6M Euribor increased with 1 basis point to 3.94% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.73% 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.
The observed impact of the disruption in the Red Sea on the European economy has so far been limited to extended delivery times, without significant effects on key economic indicators. As the global economy continues to underperform, the tensions in the Middle East have no significant influence on energy prices and consumer prices due to ample supply, decreasing demand, and companies absorbing higher costs. The ongoing disruptions in the Red Sea could lead to high inflation in the eurozone falling more slowly than expected, despite the ECB’s forecast that it will decrease from 5.4% in 2023 to 2.7% in 2024.
In December, unemployment rose in almost one third of the U.S. states (15 of 50), while it remained unchanged in the majority of the states and in the District of Columbia; Massachusetts and Rhode Island experienced the largest increase with 0.3 percentage points. The national unemployment figures remained stable at 3.7%, despite the economy adding 216,000 new jobs in December, an increase from the 173,000 in November.
Oil prices have fallen after reaching the highest level of this year, with West Texas Intermediate down 0.5 percent to $74.37 and Brent crude down 0.6 percent to $79.55 per barrel. The decline is attributed to the reopening of Libya’s largest oil field and a less unrest in the Red Sea, while at the same time freezing cold hampers oil production in North Dakota and drone attacks from Ukraine disrupt Russian oil exports.
The 6M Euribor increased with 2 basis points to 3.93% compared to previous business day. The 10Y Swap increased with 6 basis points to 2.75% 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.
Consumer sentiment in January was slightly less negative than in December, as reported by the Statistics Netherlands (CBS). This marks the fifth consecutive month of improved consumer confidence. Concurrently, the CBS indicates that businesses invested 3.6 percent less in November, following a growth of over 2 percent in October.
Gas prices continue to decline due to oversupply, relative political stability, weather influences, and surplus sustainable energy. Currently, the 1-month forward gas contract (per MWh) is priced at €27. ING expects a continuation of the downward trend to new lows of €26 per megawatt-hour and subsequently to €24. However, Banca d’Italia expresses concerns about the potential impact of the recovery in Chinese demand on global gas prices.
Since 2013, the CBS has reported an annual increase in existing home prices compared to the previous year. During that period, home prices nearly doubled. However, according to the latest CBS figures, 2023 marked a change, with a decrease of 2.8%.
The 6M Euribor decreased with 2 basis points to 3.91% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.69% 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.
In December, retail sales in the United Kingdom fell more sharply than expected, with a monthly volume decline of 3.2% compared to economists’ anticipated decrease of 0.5%. On an annual basis, volumes dropped by 2.4%, contrary to economists’ expectations of a 1.2% increase. Volumes were 4.8% lower than in February 2020, just before the onset of the COVID-19 crisis. Despite these declines, the value of sales was 13.9% higher than pre-COVID levels, attributed to increased prices.
Savings deposit rates in the Netherlands have recently dropped across all terms, following a period of rising rates over the past 18 months. This shift is linked to declining market interest rates due to inflation normalization. For instance, the average interest for a five-year fixed deposit fell from 3.6% to 2.9%. Dutch consumers have increased their allocation to fixed deposits, reaching nearly 17% in November, the highest in a decade, according to De Nederlandsche Bank.
In December, passively managed index funds and ETFs in the United States surpassed their actively managed counterparts in total assets, with $13.3 trillion compared to $13.2 trillion for active funds. This shift reflects the enduring popularity of ETFs and a trend toward passive investment strategies. Over the past decade, passive funds have steadily gained market share, with the launch of the first index fund by Vanguard in 1976 influencing this transformation.
The 6M Euribor increased with 7 basis points to 3.93% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.72% 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.
According to government data released on Friday, consumer prices in Japan rose less in December compared to the previous month. The annual inflation rate, including the effects of fresh food and energy, stood at 2.6%, lower than the 2.8% reported a month earlier. Excluding the impact of price changes in fresh food, the year-on-year inflation rate was 2.3%, compared to 2.5% in the previous month. These figures align with economists’ expectations, who had also predicted an inflation rate of 2.3%. Inflation has now remained above the Bank of Japan’s targeted level of 2% for twenty consecutive months.
On Thursday, a large majority of the Senate in the United States approved a temporary budget measure that covers government funding until March, averting a shutdown on Friday. The Senate voted 77 in favor to 18 against the measure. This marks the third time a temporary budget has been passed for the fiscal year 2024, which began in October.
On Thursday, Statistics Netherlands reported that unemployment in the Netherlands increased slightly in December. On a monthly basis, the unemployment rate rose from 3.5% to 3.6%, which also represents the annual average for the entire year 2023. Throughout the year 2023, the average number of unemployed individuals slightly increased compared to the previous year, from 350,000 to 359,000. The net labor force participation rate increased in 2023 to 73.1, compared to 72.2 in 2022.
The 6M Euribor decreased with 1 basis point to 3.86% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.73% 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.
The Chinese economy grew at a lower pace than expected in the fourth quarter of last year, according to official figures released on Wednesday. The Chinese gross domestic product grew 5.2 percent, lower than the anticipated 5.6 percent as per economists. Throughout 2023, the Chinese economy grew at the same rate, surpassing Beijing’s target of 5.0 percent. In comparison, the Chinese gross domestic product grew by 3.0 percent in 2022 when the country was still dealing with strict COVID-19 measures. Objectives for the current year are expected in March, with experts predicting growth between 4.0 and 4.9 percent.
In December, inflation in the eurozone rose, according to final figures from Eurostat, but core inflation actually decreased. Consumer prices increased by 2.9 percent on a yearly basis last month, in line with earlier estimates. This marked an increase from 2.4 percent in November and 2.9 percent in October, while inflation in December 2022 stood at 9.2 percent. Core inflation, a significant gauge for the European Central Bank (ECB), was 3.4 percent on a yearly basis in December, according to previous estimates, compared to 3.6 percent the previous month. This measurement does not include the volatile prices of energy, food, alcohol, and tobacco. On a monthly basis, consumer prices in the eurozone increased by 0.2 percent in December, while core prices increased by 0.5 percent.
In December, industrial production in the United States unexpectedly increased, according to an announcement from the Federal Reserve on Wednesday. The production of the American industry rose by 0.1 percent, contrary to economists’ expectations of a 0.1 percent decrease in December. The figures for industrial production in November were revised down to an unchanged level, while initially, an increase of 0.2 percent had been reported. Capacity utilization remained unchanged at 78.6 percent. Previously, a capacity utilization of 78.8 percent had been reported for November, and economists had also expected a figure of 78.6 percent for December.
The 6M Euribor is unchanged at 3.87% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.69% 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.
The Empire State Index, which measures industrial activity in the New York region, unexpectedly plunged from 14.5 positive to 43.7 negative in January, marking the lowest level since May 2020. Economists had, on average, anticipated a decline to 4.0 negative.
The ZEW index, a key German economic sentiment indicator reflecting the expectations of institutional investors, saw a rise from 12.8 to 15.2 in January, signalling a more optimistic economic outlook. Nevertheless, the current situation index dipped slightly from -77.1 in December to -77.3 in January.
On Tuesday, the oil price showed some volatility, ultimately declining by 0.4 percent to settle at $72.40 per barrel of West Texas Intermediate. Analysts point to instability in the Red Sea but emphasize that significant supply disruptions are needed to drive a substantial increase in oil prices. The OPEC monthly report and the weekly oil inventories in the U.S. are now seen as the next focal points for the market.
The 6M Euribor decreased with 3 basis points to 3.87% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.65% 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.
The European gas price fell below €30 per megawatt-hour on Monday afternoon. Persistent good weather, coupled with ample supply of liquefied natural gas (LNG), is exerting downward pressure on the wholesale rate.
The German economy contracted for the first time since the COVID-19 pandemic last year. The largest economy in the eurozone shrank by 0.3% in 2023 compared to the previous year, according to preliminary figures from the German statistical office Destatis.
For the eleventh consecutive week, mortgage rates are decreasing slightly. This goes against expectations, as interest rates increased last two weeks. Van Bruggen Advisory Group attributes this to a shrinking mortgage market. In 2023, significantly fewer mortgages were taken out compared to 2022.
The 6M Euribor decreased with 2 basis points to 3.90% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.62% 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.
