Market Information Thursday 1 September 2022

Eurozone inflation jumped to another record high and will soon hit double-digit territory, increasing expectations of a string of big interest rate hikes even as a painful recession appears increasingly certain. Driven by expensive gas and drought, consumer prices jumped more than expected in August and further rises are already in the pipeline, suggesting more pain for households as they burn through their cash reserves.

Goldman Sachs expects the European Central Bank to raise interest rates by 75 basis points at its policy meeting next week after data on Wednesday showed eurozone inflation hitting a new record high. “Given today’s stronger-than-expected inflation data -together with hawkish commentary and upside risks to near-term growth – we now expect the ECB to hike by 75bp at the September meeting,” the U.S. bank said in a note on Wednesday.

The US stock market closed lower again on Wednesday after a turbulent day. This makes it the fourth time in a row that Wall Street ended in the red. The broad S&P 500 dropped 0.8%, Dow Jones lost 0.9% and technology stocks also dipped: Nasdaq ended 0.6% lower. At stock market opening, the indices were still rising. S&P 500 gained 0.7% and Dow Jones was 0.5% higher. Nasdaq also climbed 0.6%. Possibly a disappointing report on the U.S. labor market briefly reassured investors. If the labor market collapses, this could be a reason for the central bank not to intervene too violently with interest rate increases.

The 6M Euribor is unchanged at 1.08% compared to previous business day. The 10Y Swap increased with 2 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.