Market Information Friday 1 May 2020

The European Central Bank (ECB) eased monetary policy on Thursday by implementing two measures. First, the refinancing rate for banks (TLRO III) is further reduced to -1.0%. Second, the ECB is introducing a new lending program that will allow banks to register for emergency loans (PELTROs) seven times at a rate of -0.25% as of May 2020. This way, the ECB aims to create an effective reserve for liquidity in the eurozone. In addition, the ECB continues with the EUR 750 billion emergency buy-back program. Official interest rates remain unchanged.

Preliminary figures from Eurostat show that consumer prices in the eurozone increased by 0.4 percent in April 2020 compared to April 2019. In March 2020, consumer prices increased by 0.7 percent compared to March 2019. Core inflation, which is an important benchmark for the ECB, was 0.9 percent on an annual basis in April 2020. In March 2020, annual core inflation was 1.0 percent.

Eurostat also reports, based on preliminary figures, that the economy in the eurozone contracted sharply in the first quarter of 2020. Gross domestic product (GDP) decreased by 3.8 percent in the first quarter of 2020 compared to the fourth quarter of 2019. In the fourth quarter of 2019, GDP grew by 0.1 percent ten in the third quarter of 2019.

The 6M Euribor decreased with 1 basis point to -0.17% compared to previous business day. The 10Y Swap decreased with 7 basis points to -0.16% 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.