The US economy shrank more in the first quarter of this year than initially thought. This became apparent on Wednesday from the third and final estimates by the US Department of Commerce. The gross domestic product (GDP) did not decline in the first quarter by 1.5% on an annual basis, but by 1.6%. In the fourth quarter last year, the growth rate was still 6.9%, which means that the US economy grew by 5.7% in the whole of 2021. The PCE price index rose 7.1% in Q1, up from 6.4% a quarter earlier. The previous estimate for the first quarter stood at 7.0%. The core price index, i.e. excluding food and energy, rose 5.2%, 0.1% point higher than in the previous estimate. It was 5.0% in the fourth quarter.
Consumer confidence in the eurozone deteriorated further in June. This was shown Wednesday by figures from the European Commission. The index which reflects the confidence decreased from -21.2 in May to -23.6 in June. This was in line with expectations. In the business sector, sentiment actually improved somewhat. Confidence in manufacturing improved from 6.5 to 7.4 positive. Confidence in the services sector went from 14.1 to 14.8. Economic sentiment in the eurozone deteriorated slightly, with the index falling from 105.0 to 104.0. Here, however, a decline to 103.0 was anticipated.
Consumer prices in Germany rose less rapidly in June than in the previous month and than expected. This was shown Wednesday by preliminary figures from the German statistical office Destatis. The inflation rate was 7.6% in June on an annual basis against 7.9% in May. Economists consulted in advance had expected 8.0% inflation in June. In June, energy prices in Germany increased by 38.0%, slightly less than the increase in May, and food prices rose by 12.7%. On a monthly basis, prices rose by 0.1% in June, compared to the forecast of 0.5%.
The 6M Euribor increased with 1 basis point to 0.23% compared to previous business day. The 10Y Swap decreased with 6 basis points to 2.35% 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.
Christine Lagarde stressed Tuesday in a speech at the European Central Bank’s annual forum that it will not hesitate to take bigger steps and raise interest rates faster to fight inflation, if necessary. The current uncertain economic conditions are reason for the central bank to gradually reduce monetary support, Lagarde argued.
U.S. consumer confidence fell sharply in June as worries about high inflation left consumers anticipating economic growth could weaken significantly in the second half of the year. The Conference Board said on Tuesday its consumer confidence index dropped 4.5 points to a reading of 98.7 this month.
Analysts at both Cox Automative and Edmunds.com lowered their U.S. auto sales forecasts for 2022, as supply chain disruptions continue and will leave dealers short of new vehicles for the foreseeable future. Full-year forecasts dropped to 14.4 million vehicles from 15.3 million.
The 6M Euribor is unchanged at 0.22% compared to previous business day. The 10Y Swap increased with 7 basis points to 2.41% 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 figures published by the U.S. government showed an increase in durable goods in the United States. Economists had counted on a 0.2% increase in May, but it turned out to be 0.7% in the end. In addition, the number of home sales also increased by 0.7% on a monthly basis after the previous six months showed only a decline.
The price for a barrel of West Texas Intermediate ended yesterday almost 2% higher at USD 109.57. A price ceiling for Russian oil is expected to be agreed upon at the G-7 summit. However, it is still unclear whether this will have an impact on the oil price since the G-7 has already agreed not to buy any more Russian oil from the end of this year. Furthermore, the question remains whether large countries such as China and India will agree to the halt on the import of Russian oil especially since Russia is currently selling their oil at a large discount.
Yesterday, for the first time since 1918, Russia was unable to pay interest on foreign debts. This is an amount of USD 100 million for which they have already received a one month extension. This could have major implications for Russia as some other debts may require early repayment once Russia defaults on an outstanding debt.
The 6M Euribor decreased with 5 basis points to 0.22% compared to previous business day. The 10Y Swap increased with 11 basis points to 2.34% 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 annual ECB forum takes place in Portugal from Monday to Wednesday. This could potentially provide information about ECB monetary policy and economic developments. On Tuesday, German, French and American consumer confidence are scheduled. Japanese consumer confidence is scheduled for Wednesday as well as Dutch business confidence. On Friday, we will finish the week with Japan’s Tankan index and manufacturing purchasing managers’ indices in Japan, China, Europe and the Americas.
The United States will join other countries in blocking Russian gold imports in order to scale up sanctions against Moscow over its invasion of Ukraine. This was reported by a US government official to the Wall Street Journal this weekend. Earlier, the Reuters news agency reported that Washington wants to impose a price cap on Russian oil, in order to further limit Putin’s profits. That proposal will also be discussed during the G7 summit.
The Bank for International Payments indicates that the world’s central banks should raise interest rates sharply, even if this significantly harms growth. There is a risk of an inflation spiral like in the 1970s, if interest rates do not rise sharply. Even if central banks do raise interest rates sharply, the global economy could still face a toxic combination of low or negative growth and high inflation.
The 6M Euribor decreased with 2 basis points to 0.27% compared to previous business day. The 10Y Swap increased with 2 basis points to 2.23% 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 annualized inflation rate came in at 2.5% in May. This was revealed by figures published this morning. Inflation in April was also 2.5%. Core inflation, excluding food prices and volatile energy prices, in May was 0.8%. On a monthly basis, consumer prices in Japan rose 0.2% in May.
The Dutch economy still showed growth in the first quarter of 2022. This was revealed this morning by figures from a second estimate by Statistics Netherlands. In the earlier publication of the figures, growth was estimated at 0.0%. In the current second estimate the growth rate is 0.4% on a quarterly basis. The adjustment is due to new, more comprehensive data for the first quarter of 2022 and the availability of new annual figures for 2020 and 2021.
The Eurozone economy grew at a slower pace in June than in May. The index for the service sector came to 52.8 in June compared to 56.1 in May. The index for manufacturing fell to 52.0 in June from 54.6 in May. The composite index fell from 54.8 to 51.9, its lowest reading in 16 months. Analysts point to high inflation and low consumer and producer confidence as reasons for the reduced growth.
The 6M Euribor is unchanged at 0.29% compared to previous business day. The 10Y Swap decreased with 21 basis points to 2.21% 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 Federal Reserve (FED) plans to continue to raise interest rates until the central bank sees clear evidence that inflation is slowing to the 2% target, chairman Jerome Powell told a Senate committee on Wednesday. The central bank raised the interest rate last week by 0.75 percentage points. That was the largest increase in interest rates since 1994. Powell and his colleagues have hinted that a second increase of 75 basis points may be necessary at the end of July. Fed central bankers expect interest rates to rise to at least 3% this year. Most policymakers expect a rise to 3.25% or 3.50%.
Consumer confidence in the European Union deteriorated in June. This was shown Wednesday by preliminary figures from the European Commission. The index, which reflects confidence, decreased in June by 1.9 percentage points to -24.0. The confidence index for the euro area decreased by 2.4 percentage points to -23.6.
Confidence in the Dutch housing market is falling. This is shown by the housing index published Wednesday by ING. The indicator fell sharply, from 107 to 98. “This is a significant drop in sentiment,” said ING. The decline is mainly due to the stabilisation of house prices and the recent rise in mortgage rates. It is the first measurement since the war in Ukraine. Concerns about their own financial situation is a concern for a third of the respondents. This is not too bad, ING believes. Stagnating house prices do give hope to those selling on who hope to buy their desired home more easily. For many owner-occupiers, 40% of the respondents, the higher energy prices are an incentive to improve sustainability: two out of three respondents want to do so, especially young people under 34. More than half of them mention solar panels as an investment, alongside solar boilers, heat pumps and insulating glass.
The 6M Euribor increased with 2 basis points to 0.29% compared to previous business day. The 10Y Swap decreased with 14 basis points to 2.42% 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 producer prices in the United Kingdom increased less sharply on a monthly basis in May 2022. This was revealed today by the British Bureau of Statistics ONS. On a monthly basis, the prices increased with 1.6% after an increase of 2.8% in April 2022. On an annual basis, producer prices increased by 15.7% in May. In April the prices increased with 14.7%. Economists had expected an increase of 1.5% on a monthly basis and 14.8% on an annual basis.
Dutch consumers spent 14.8% more in April 2022 than a year earlier. This was reported by the Central Bureau of Statistics today. In March consumption increased by 11.2% and in February with 13.4%. Last year there were still corona measures in April. Adjusted for price changes, consumers spent about 27.0% more on services in April.
Investments in the Netherlands decreased in April. This was shown today from figures from the Central Bureau of Statistics. The volume of investments decreased by 0.5% year-on-year in April. In March, there was a decline of 3.4%, but in February investment still increased by 5.3%. According to Statistics Netherlands, this decrease in April was caused by less investment in infrastructure. Statistics Netherlands indicates that the conditions for investments in June are expected to be the same as in April.
The 6M Euribor decreased with 2 basis points to 0.27% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.56% 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 Dutch government has decided to increase the output of the coal power plants . By doing so, the Netherlands has declared the first level of a gas crisis. As a result of this decision, CO2 emissions will increase in the coming period and the government will have to find other measures to compensate for the extra emissions. According to the Minister for Climate and Energy, there is no shortage in the short term and the Netherlands is currently filling the gas storage above the European standard. The intention remains to close the gas fields in Groningen in 2023 or 2024, but if the energy supply is at risk, more gas can be obtained from Groningen.
The ECB said on Monday that the European workforce is expected to grow by roughly 0.2% to 0.8% in the medium to long run, caused by the Ukrainian refugee crisis. Due to new rules from Brussels, employers do not have to do any extra administrative work to hire Ukrainians, so that they can start working on the European market faster.
After European stocks ended slightly in the green on Monday, European stocks opened higher today. Wall Street closed its doors yesterday due to the celebration of Juneteenth, which resulted in a quiet trading day for European stocks. However, tension in the market is expected to continue for a while as long as inflation is not under control.
The 6M Euribor increased with 4 basis points to 0.29% compared to previous business day. The 10Y Swap increased with 9 basis points to 2.52% 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.
It will be a relatively quiet week on the macroeconomic front. On Monday, the market will pay particular attention to German producer prices, which provide an indication of future inflation figures. Halfway through the week a series of Dutch macro data and consumer confidence in both the eurozone and the United Kingdom will be published. On Thursday, the main focus will be on the preliminary purchasing managers indices. The Turkish central bank will also decide upon interest rates on Thursday. On Friday we will close the week with confidence figures from several countries.
The Chinese central bank has kept interest rates stable today, while many other countries are adjusting their monetary policy to compose the inflation. The People’s Bank of China remained the interest rate for one-year interbank loans, the Loan Prime Rate, on a level of 3.70 percent. The decision was expected by analysts and traders, after the central bank also left the rate on the one-year credit facility unchanged at 2.85 percent last week.|
Australia’s biggest building materials manufacturers are slowing down their operations, hiking prices and considering moving production offshore to manage a spike in power and gas bills, adding to pressure on the government to resolve the country’s energy crisis. The price jump has been intensified by record high global coal and gas prices, caused by sanctions on Russia. Australia’s new resources minister, Madeleine King, has indicated that all options are being considered for dealing with gas supply challenges.
The 6M Euribor increased with 1 basis point to 0.25% compared to previous business day. The 10Y Swap decreased with 8 basis points to 2.43% 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 England announced Thursday that its interest rate will be raised by 25 basis points from 1.00% to 1.25%, the highest level in over 10 years. Many analysts were expecting a 0.50% rate hike, but in the vote, six policymakers favored 25 basis points versus three for 50 basis points. Larger steps may be needed, however, to curb inflation, the central bank indicated.
Japan’s central bank, the Bank of Japan, announced this morning that it will not raise its policy rate. The Bank of Japan is maintaining its short-term interest rate at negative 0.1% and is also maintaining its target for a rate around zero on 10-year government bonds. Inflation in Japan is expected to reach 2% this year, according to the central bank.
The closing price of a barrel of West Texas Intermediate (WTI) was 2.0% higher at the end of the day Thursday than at the beginning of the day. A price of a barrel of WTI now stands at USD 117.58. However, on a weekly basis, the price fell by 4.0%. According to analysts, the various and (in some cases unexpected) interest rate increases have a depressing effect on the oil price. In addition, demand in the United States for gasoline and heating oil has fallen.
The 6M Euribor increased with 6 basis points to 0.24% compared to previous business day. The 10Y Swap increased with 6 basis points to 2.51% 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 Central Bank (ECB) scheduled an emergency meeting yesterday. In the meeting it was decided that proceeds from maturing purchased bonds will be flexibly reinvested in order to keep interest rate spreads in the Eurozone under control. The reason for this is the fact that in recent days the differences between German debt and Italian debt rose sharply. For example, Italian interest rates rose above 4%. By reinvesting maturing bonds primarily in notes from countries where the risk premiums are rising too fast, the ECB hopes to moderate the rise.
The U.S. Federal Reserve has raised the key interest rate by 75 basis points. This was announced by the US central bank last night. It is the strongest increase since 1994. The federal funds rate is now raised to a range of 1.50% – 1.75%. In March the interest rate was already raised by 25 basis points and in May rates were increased with 50 basis points.
The Eurozone experienced a substantial trade deficit again in April, according to Eurostat. In April 2022, total exports were EUR 224.0 billion, up 12.6% from April last year. However, total imports rose much faster, by 39.4% to EUR 256.4 billion. As a result, the Eurozone had a trade deficit of EUR 32.4 billion in April this year. This compares to the trade surplus of EUR 14.9 billion in April 2021.
The 6M Euribor increased with 7 basis points to 0.18% compared to previous business day. The 10Y Swap decreased with 17 basis points to 2.45% 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 head of parliament’s financial committee states that Ukraine’s budget revenues cover less than half of expenditures following Russia’s invasion, and the government will have to cut budget spending sharply if no more external financial assistance will be provided. The government has collected 101 billion hryvnias (USD 3.42 billion) in taxes in May, but has spent 250 billion hryvnias financing the army and supporting people who had been forced to leave their homes or whose homes have been destroyed.
The Russian rouble hit three-week highs against the euro and U.S. dollar on Tuesday, continuing to climb despite recent interest rate cuts and a looming economic crisis. The Russian currency has been supported by capital controls that Russia imposed in late February after sending tens of thousands of troops into Ukraine, though the recent strength has triggered policymakers to rethink their economic response to Western sanctions.
The Turkish central bank’s new requirement for banks to hold bonds against foreign exchange deposits has pushed yields sharply lower and, according to analysts, positioned the state as the dominant player in the debt market. The move was one of several measures designed to utilise banks and bond markets to help cool rampant inflation and stabilise a sliding currency. It also reinforced President Tayyip Erdogan’s unorthodox commitment to low interest rates.
The 6M Euribor increased with 3 basis points to 0.11% compared to previous business day. The 10Y Swap increased with 25 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.
After a rapid recovery of the Dutch economy following the Corona crisis, economic growth will be practically stagnant for the rest of this year, according to new economic estimates from the Dutch Central Bank. Inflation is expected to reach 8.7% in 2022 compared to 2.8% last year. In addition, DNB expects growth to reach 2.8% in 2022 compared to 5.0% a year earlier. Due to the ongoing uncertainty surrounding the conflict between Russia and Ukraine, DNB has also prepared a new scenario in which uncertainty and energy prices will remain at a high level for longer. In this scenario, gross domestic product will increase by 0.8% less than estimated and inflation will even rise to 11%.
Oil production in Libya was almost completely halted on Monday due to a political crisis. The crisis caused almost all ports and oil fields to be closed. Only a single oil field in the southwest is still active which has led to daily oil production falling by over 90% compared to last year.
The Japanese industry produced less in April, according to figures released today by Japan’s Ministry of Trade and Industry. On a monthly basis, a decline of 1.5% was seen and on a yearly basis, production fell by 4.9%.
The 6M Euribor increased with 2 basis points to 0.08% compared to previous business day. The 10Y Swap increased with 17 basis points to 2.37% 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 number of bankruptcies in the Netherlands rose in May. This was shown today from figures from the Central Bureau of Statistics. The number of bankrupt companies rose by 71 on a monthly basis in May. April was the lowest level since the start of the time series in January 1981. In May, 210 companies and institutions, including sole proprietorships, were declared bankrupt. Out of all the different industries, trade had the highest number of bankruptcies, at 43. That is 19 more than in April.
Research finding from today indicate that France made up more ground on Britain in attracting overseas direct investment into financial services last year. Britain still retained top spot in the European rankings – attracting 63 projects in 2021 – but the gap with second-placed France became smaller, with its neighbor recording 60, its highest number in the last decade. Foreign direct investment into financial services across Europe overall fell 2.8% last year.
Oil prices fell today as an increase in COVID-19 cases in Beijing quelled hopes for a rapid pick-up in China’s fuel demand, while worries about global inflation and sluggish economic growth further suppressed the market. Brent crude futures fell $1.81, or 1.48%, to $120.20 a barrel while U.S. West Texas Intermediate crude was at $118.81 a barrel, down $1.86, or 1.54%. Both contracts dropped over $2 earlier in the session. Prices declined after Chinese officials warned on Sunday of a “ferocious” COVID-19 spread in Beijing and declared plans to conduct mass testing in Beijing until Wednesday.
The 6M Euribor increased with 3 basis points to 0.06% compared to previous business day. The 10Y Swap increased with 7 basis points to 2.20% 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 prices in the Netherlands rose substantially in May, but less strongly than in the preceding month. This was shown Thursday by figures from the Central Bureau of Statistics (CBS). Last month, the price level rose by 8.8% on an annual basis, after an inflation of 9.6% in April. The decrease in inflation was mainly caused by the price development of energy. In May energy was 105% more expensive than a year earlier, in April it was 136% more expensive.
The economy in the eurozone grew slightly faster than expected in the first quarter. This became clear Wednesday from the final figures of the statistical office of the Eurostat. The gross domestic product (GDP) increased by 0.6% on a quarterly basis, while a growth of 0.3% was expected. On an annual basis, the eurozone economy grew by 5.4% last quarter.
The stocks of crude oil in the United States increased last week. This was revealed on Wednesday by figures from the American energy agency EIA. In the week ending 3 June, crude oil stocks increased by 2.0 million barrels to 416.8 million. Gasoline stocks decreased by 0.8 million barrels to 218.2 million barrels. Fuel oil and diesel stocks increased by 2.6 million barrels to 109.0 million. Refinery capacity utilisation was 94.2% compared to 92.6% a week earlier.
The 6M Euribor increased with 2 basis points to 0.03% compared to previous business day. The 10Y Swap increased with 5 basis points to 2.06% 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.
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German exports and imports rose in April. This was announced on Friday by the German statistics agency Destatis. Exports rose by 4.4 percent on a monthly basis. Imports increased by 3.1 percent. The figures have been adjusted for seasonal influences. Economists expected exports to rise by 1.8 percent on a monthly basis and imports to fall by 0.4 percent. On an annual basis, exports increased by about 12.9 percent in April. Imports increased by 28.1 percent.
The Japanese service sector has grown significantly in May. This was revealed today from final figures from Markit. The country’s service sector index stood at 52.6 in May. That was 50.7 in April. 51.7 was reported in the preliminary measurement. The purchasing managers’ index for the Japanese industry was found to have decreased in the final measurement on Wednesday from 53.5 in April to 53.3 in May. The composite index rose from 51.1 to 52.3. The preliminary index was 51.4. An index reading above 50 indicates growth and below 50 indicates contraction.
Russian output has already decreased by 1 million bpd since its invasion of Ukraine and is likely to decrease even further as the European Union’s ban on Russian oil kicks in. U.S. West Texas Intermediate (WTI) crude futures dropped 29 cents to $116.58 a barrel, while Brent crude futures were down 15 cents at $117.46 a barrel.
The 6M Euribor increased with 2 basis points to -0.03% compared to previous business day. The 10Y Swap increased with 6 basis points to 1.95% 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 Dutch manufacturing industry grew less fast in May. This was shown Wednesday by figures from Markit. The purchasing managers index for Dutch industry decreased from 59.9 in April to 57.8 in May. An index reading greater than 50 indicates growth, while less than 50 means contraction.
The number of job vacancies in the United States fell in April, but nevertheless remains high. This was shown Wednesday by figures from the U.S. Department of Labor. In April, the number of open job vacancies was 11.4 million compared to 11.9 million in March. In February and January, the counter stood at 11.3 million open vacancies. A year earlier, in April 2021 there were 9.3 million open job vacancies.
The unemployment rate in the eurozone was stable in April. This was reported by the European statistical office Eurostat on Wednesday. The unemployment rate in the currency union came to 6.8%, the same as in March. In April 2021 the unemployment rate in the eurozone was 8.2%.
The 6M Euribor increased with 2 basis points to -0.05% compared to previous business day. The 10Y Swap increased with 4 basis points to 1.89% 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 prices in the Netherlands in May were on average 10.2% higher than the same month in 2021, as announced by Statistics Netherlands Tuesday. The annual inflation rate decreased compared to that in April (11.2%) and March (11.7%), but was higher than the eurozone average (8.1%).
European Union leaders have agreed an embargo on Russian oil imports that will start towards the end of the year and which exempts pipeline imports that Hungary and two countries rely on. This is the toughest sanction yet on Russia for its invasion of Ukraine and aims to remove 90% of Russia’s crude imports into the EU by year-end.
The Conference Board announced that consumer confidence in the United States fell in May to its lowest level since February. The Conference Board’s Consumer Confidence index fell to 106.4 after a reading of 108.6 in April. In February, the index stood at 105.7.
The 6M Euribor increased with 1 basis point to -0.07% compared to previous business day. The 10Y Swap increased with 7 basis points to 1.85% 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.
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