Corporate loans and mortgages are rising in price. This is because investors are demanding higher fees on government loans. The rise in interest rates is causing stocks and the euro to struggle. In Germany and Italy, yields on 10-year government bonds exceeded 3% and 5% for the first time in 12 years, respectively. In America, 30-year yields rose above 5% for the first time since 2007. In addition, the main 30-year fixed-rate mortgage rose to 7.53%. This has not happened since the year 2000. The main reason for these increases is that investors increasingly believe that the European Central Bank and the Federal Reserve are keeping rates high in order to push inflation back to 2.0%.
Africa’s economic growth is being held back by the poor performance of South Africa and Nigeria. This is partly due to the recent series of power changes and high debt burdens. Sub-Saharan Africa’s economic growth slumps to 2.5% in 2023, down 1.1% from the previous year. The World Bank stated this in a biennial report, Africa’s Pulse. Every year, 10 million new Africans enter the labor market, while based on current growth there is only room for 3 million new jobs.
Statistics from Destatis, a German statistics agency, showed that German exports fell more than expected in the month of August. At the same time, imports also unexpectedly declined. Economists predicted a contraction in exports of 1.0%, this ended up being 1.2%. Imports fell against expectations by 0.4%.
The 6M Euribor decreased with 1 basis point to 4.13% compared to previous business day. The 10Y Swap decreased with 4 basis points to 3.48% 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.
Japan’s services sector grew at a lower pace in September, the index decline was smaller than in previous forecasts. The purchasing managers index for the services sector was 53.8 in September, versus 54.3 in August. The provisional forecast for September stated 53.3. For Japanese industry, the purchasing managers index also decreased from 49.6 in August to 48.5 in September.
After three consecutive days of declines, oil prices have risen again. On Tuesday, November futures for a barrel of West Texas Intermediate oil closed 0.5% higher on the New York Mercantile Exchange. In recent days, the oil price has fallen after it increased tp a level of above $95 per barrel for the first time in more than a year. One of the reasons for the strong increase was an extension of production restrictions by Russia and Saudi Arabia. For the time being, more price increases are expected, although prices above $100 per barrel are unlikely to be sustained for long because at these prices American shale oil producers will probably sharply increase their production.
On Tuesday, the American stock markets showed significant losses after bond yields rose further and the dollar gained considerably. The S&P500 index lost 1.6% while the NASDAQ Composite fell by more than 2%. The dollar was quoted at 1.0463 for the euro on Tuesday evening, while the rate was still 1.12 in July. The yield on 10-year US debt broke a new ceiling on Tuesday at a level of 4.682%. Interest rates have been on the rise again in recent weeks because the American economy is resilient, thereby reducing the chances that the Federal Reserve could lower interest rates again soon.
The 6M Euribor increased with 1 basis point to 4.14% compared to previous business day. The 10Y Swap increased with 5 basis points to 3.52% 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 Chair of the Federal Reserve Bank of Cleveland, Loretta Mester, does not rule out the possibility of the Federal Reserve raising interest rates one more time this year and then maintaining this level to bring inflation back to the targeted level of 2%. Mester made these remarks in a speech in Cleveland. In her speech, Mester expressed concerns about rising oil prices, which could impede lower inflation. The high gasoline prices strongly influence consumer price perception. With higher gasoline prices, there can be a perception that inflation is not yet under control.
Unemployment in the eurozone slightly decreased in August 2023, according to statistics agency Eurostat on Monday. Unemployment declined from 6.5% in July 2023 to 6.4% in August 2023. In August 2022, the unemployment rate was at 6.7%.
The U.S. manufacturing sector decreased much less than expected in September 2023, according to data from the Institute for Supply Management released on Monday. The purchasing managers’ index rose from 47.6 in August 2023 to 49.0. The market had expected an index reading of 48.0.
The 6M Euribor is unchanged at 4.13% compared to previous business day. The 10Y Swap increased with 8 basis points to 3.47% 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 September, both the Chinese industry and the service sector continued to grow, albeit at a slightly slower pace. The purchasing managers’ index for the Chinese industry dropped from 51.0 in August to 50.6 in September, but this still marks the second consecutive month of growth.
A last-minute American government shutdown was averted as the U.S. Senate approved a bill allowing the government to remain open for at least another 45 days. President Joe Biden announced that he had signed the resolution. For House Speaker McCarthy, this decision brings weeks of suspense with a potential impeachment procedure because of this bill.
According to final figures from the University of Michigan released last Friday, it appears that American consumer confidence in the economy declined less significantly in September than initially indicated by preliminary data. The index was estimated at 67.7 but came in at 68.1. Simultaneously, inflation, initially reported at 3.1%, has cooled slightly less than the originally reported 3.2%.
The 6M Euribor decreased with 1 basis point to 4.13% compared to previous business day. The 10Y Swap decreased with 7 basis points to 3.39% 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.
Pending home sales in the United States decreased substantially more in August than initially expected, according to figures published by real estate agency NAR on Thursday. The index fell by 7.1% on a monthly basis, after an increase of 0.9% in July this year. Economists expected a decline of 1.0%. The major underlying factor is the American mortgage interest rate, which is currently above 7.0%.
Consumer price inflation in the Netherlands decreased substantially in September. On Friday, Statistics Netherlands (CBS) published a first estimate showing that the price level rose by just 0,2% on an annual basis last month. The decline was preceded by an inflation rate of 3.0% in August, of 4.6% in July and of 5.7% in June. This initial quick estimate corresponds to an absolute decline in consumer prices of 0.4% compared to August. The full inflation figures will be published by the CBS on October 10.
Figures from the Office for National Statistics showed on Friday that growth in the British economy in the second quarter has been confirmed in a new measurement. Quarterly growth in British gross domestic product increased by 0.2%. This figure follows growth of 0.3% a quarter earlier. Previously, growth of 0.1% was expected for the first quarter.
The 6M Euribor increased with 5 basis points to 4.14% compared to previous business day. The 10Y Swap increased with 8 basis points to 3.46% 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.
Producer sentiment of Dutch manufacturers remained unchanged in September. This was revealed on Thursday by figures from Statistics Netherlands. The confidence index came out at negative 2.2 in September, below the past 20-year average of 1.4. Confidence reached its highest value in November 2021 at 12.7. The lowest value was recorded in April 2020, at negative 28.7.
Minneapolis Fed Chairman Neel Kashkari is not sure that current interest rates will be enough to bring down inflation. When asked by CNBC if the funds rate of 5.25% to 5.50% will be high enough to reduce inflation to 2.0%, the chairman indicated not to be certain and that the neutral interest rate level, which neither stimulates nor inhibits the economy, may be higher.
Consumer confidence in France fell in September. This was revealed on Wednesday by figures from the French statistics agency Insee. The confidence index came in at 83 in September against 85 in August. Economists’ expectations for September were at 85.
The 6M Euribor decreased with 3 basis points to 4.09% compared to previous business day. The 10Y Swap increased with 3 basis points to 3.38% 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 July, house prices in the largest urban regions of the United States increased on a yearly basis for the first time since February, according to data from Standard & Poor’s Case-Shiller. There was a 0.1 percent increase in the twenty largest regions, while a 0.9 percent increase was observed in the ten largest regions. In June, house prices had declined by 1.2 percent in the twenty largest regions and by 0.5 percent in the ten largest regions on a yearly basis. On a monthly basis, prices in July increased by 0.6 percent in both the twenty and ten largest regions.
The oil price rose on Tuesday, after four previous declines, igniting the possibility of a revival in a sustained uptrend. On the New York Mercantile Exchange, the future price of West Texas Intermediate crude oil closed 0.9 percent higher at $90.45 per barrel, while Brent crude rose 0.6 percent to nearly $92.45 per barrel. The earlier declines were likely prompted by profit-taking, but some traders remain optimistic about the potential for the oil price to surpass the $100 mark. This recent downturn may also be linked to uncertainty regarding oil demand after the Federal Reserve announced that interest rates will continue to rise and remain elevated longer than previously anticipated by investors.
Consumer confidence in Germany has declined once again, according to measurements by the research agency GfK, which assesses one month ahead. The confidence index for October stood at 26.5 negative, compared to 25.6 negative in September. This figure was slightly lower than the anticipated 26.0 negative that economists had predicted for OctoberThe 6M Euribor increased with 4 basis points to 4.12% compared to previous business day. The 10Y Swap increased with 1 basis point to 3.35% 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 September, the Ifo Business Climate Index in Germany declined slightly. Although companies are being somewhat less negative about future expectations, the economic sentiment in Germany remains weak. The composite index for the German business climate decreased from 85.8 in August to 85.7 in September, slightly exceeding economists’ expectations of 85.0.
The US dollar remains strong following hints from the Federal Reserve that interest rates may rise further later this year and stay higher than previously expected in the coming year. While the Fed has indicated an extended period of higher interest rates, it is expected that the Fed may refrain from a rate hike at the next meeting due to potential economic downturns in the US.
Global steel production increased again in August, rising by 2.2% compared to August 2022. This was driven by the world’s largest steel producer China, with a 2.6% increase to 86.4 million tons. In the US, Japan, and Germany, production decreased ranging from nearly 2% to over 4% percent. Across the entire European Union, the decline in steel production was nearly 10%. The production increase follows a previous rise of 6% in July.
The 6M Euribor increased with 1 basis point to 4.08% compared to previous business day. The 10Y Swap increased with 6 basis points to 3.34% 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 Commissioner for Trade, Valdis Dombrovskis, described the trade relationship between the European Union and China as “very unbalanced” during his visit to China. Dombrovskis highlights this because the EU faces a trade deficit of € 400 billion with China, with concerns also raised about subsidies to Chinese electric vehicle manufacturers. Both the EU and the United States are considering investigations into unfair subsidies for Chinese electric cars.
The United States is seriously preparing for a potential government shutdown starting October 1, caused by delay tactics from some Republican members of Congress. This marks the second possible shutdown this calendar year. A shutdown would have implications for government employees, military personnel, and social benefits. The previous time a shutdown was threatened, there was a significant short-term surge in rates on US short-term government bonds.
Oil prices rose due to concerns over Russia’s export ban on gasoline and diesel, following reduced shipments and an increase in European diesel prices. Experts expect Russia will maintain the ban for at least a month to capitalize on a greater price difference between crude and refined oil.
The 6M Euribor is unchanged at 4.07% compared to previous business day. The 10Y Swap is unchanged at 3.28% 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 Bank of Japan left interest rates unchanged at the monetary meeting on Friday. The Bank of Japan maintained the short-term interest rate at minus 0.1%. The decision was unanimous.
The leading indicators for the American economy once again declined in August, as reported by The Conference Board on Thursday. The Leading Economic Index decreased by 0.4%, reaching 105.4. In July 2023, the index declined by 0.3%.
The Bank of England has decided not to raise interest rates, with a narrow majority of votes. The central bank announced this on Thursday. Market experts had anticipated an increase of 25 basis points to 5.50%, although a pause was not entirely ruled out.
The 6M Euribor is unchanged at 4.07% compared to previous business day. The 10Y Swap increased with 5 basis points to 3.28% 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.
