Market Information Friday 31 January 2020

After more than 47 years, the United Kingdom will leave the European Union on Friday. After the Brexit becomes official on Friday at midnight, negotiations about a trade agreement between Europe and the United Kingdom begin. These negotiations focus on agreements on state aid, competition rules and taxes. The Dutch business association Evofenedex, speaking on behalf of 15,000 trade and production companies, fears possible import taxes and an uneven playing field.

The European economy seems to have found its way up again. New figures indicate that the slowdown in growth is coming to an end. In the nineteen euro countries, unemployment fell to 7.4% of the labour force in December 2019. Since May 2008, the unemployment number has not been this low. Confidence in the economy in the eurozone is growing as well. The Eurostat index for economic sentiment rose to 102.8 in January, the highest level since summer 2019. This is partly due to the more positive sentiment in the industrial sector.

The Bank of England (BoE) has decided to leave its main interest rate unchanged at 0.75%. Beforehand, there was disagreement in the market as to whether the BoE would change the interest rate. Some analysts expected an interest rate cut to 0.5% because wage growth and inflation deteriorated since the previous interest rate decision. The BoE sees uncertainty diminishing due to the accommodative monetary policies of central banks and the increased confidence among companies. In response to the decision, the British pound rose versus the euro and the dollar.

The 6M Euribor is unchanged at -0.34% compared to previous business day. The 10Y Swap decreased with 3 basis points to -0.03% 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.