Market Information Monday 25 July 2022

The macroeconomic agenda for this week is relatively calm, but there are certainly some important things on the schedule. Much attention will be paid to the interest rate decision of the US Federal Reserve (Fed) on Wednesday evening. Last week, the European Central Bank (ECB) raised the interest rates for the first time in 11 years, and not by 25 basis points but by 50 basis points. It seems certain that the Fed will also raise interest rates again this week, but the question remains by how much. Other macro figures next week are consumer confidence in the United States (UN) and Germany, some inflation figures in Europe and the US and a series of growth figures.

The Fed is expected to raise interest rates by at least 75 basis points next week. But the markets have taken an example from the Bank of Canada and the ECB, saying the Fed may need to move beyond this level and target a 100 basis point hike. Although the IMF still expects economic growth of 2.2% in 2023, currency specialists see growth coming in at 1.0% to 1.5%. The US housing market is of great concern. Last week, the number of new homes under construction in the US fell to its lowest level since September 2021.

The Japanese economy showed less growth in July. This was revealed on Friday from preliminary figures from Markit. The Japanese manufacturing index was found to have fallen from 52.7 in June to 52.2 in July. The composite index thus fell from 53.0 to 50.6. An index reading greater than 50 indicates growth, while less than 50 indicates contraction.

The 6M Euribor decreased with 1 basis point to 0.63% compared to previous business day. The 10Y Swap decreased with 16 basis points to 1.86% 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.