Market Information Monday 26 August 2019

This weekend, China announced that it will impose import duties on USD 75 billion of American products, such as soy, cars and crude oil. In response to the news, Donald Trump said that American companies should look for alternatives to producing goods in China. In addition, he stated that the USD 300 billion import duties announced last week will be further increased from 10% to 15%.

At the G7 summit that took place last weekend in Biarritz in France, the US concluded a principle trade agreement with Japan. An important part of the agreement is Japan’s commitment to buy more American agricultural products, while the countries also agreed upon lowering import duties for Japanese beef and Japanese cars.

According to the monthly World Trade Monitor of the Netherlands Bureau for Economic Policy Analysis, the volume of world trade decreased by 1.4% in June 2019 compared to a month earlier. The volume of world trade increased by a revised 0.6% in May. Over the entire second quarter of 2019, trade fell by 0.7%. This is a bigger decline than in the first quarter, when trade volumes decreased by 0.3%.

The president of the German central bank Jens Weidmann said in an interview that he thinks it is too early for the ECB to take new stimulus measures. At the previous policy meeting, Mario Draghi hinted that the ECB will come up with new stimulus measures in September, such as an interest rate cut or a restart of the QE programme. According to Weidmann, the current economic outlook is particularly uncertain, and Weidmann states that the side effects of such interventions will increase, while the effectiveness of the measures are likely to decrease.

The 6M Euribor is unchanged at -0.42% compared to previous business day. The 10Y Swap decreased with 2 basis points to -0.22% 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.