Market Information Thursday 12 December 2019

The Federal Open Market Committee has announced that the Federal Funds Target Rate will remain unchanged. This means that the benchmark rate in the United States remains at a bandwidth of 1.50% -1.75%. The decision to leave the interest rate unchanged was unanimous for the first time since May 2019 and was also generally expected on the financial markets. The Fed mentioned that the state of the economy justifies the current rates. The Fed pointed among other things to economic growth and inflation. Furthermore, developments in the labor market were strong. The relatively weak exports remain a concern.

In a report, Moody’s is pessimistic about the outlook of the European banking sector. The credit rating agency changed its outlook for banks in the euro area from stable to negative. According to Moody’s, the weaker economic outlook will undermine loan/asset quality and profitability, while euro area banks will also suffer from the monetary policy of the European Central Bank (ECB). In addition, uncertainty about Brexit in Great Britain causes weaker market conditions and less demand for loans.

Based on definitive figures, the German Federal Statistical Office Destatis has announced that inflation in Germany was 1.1% in November 2019 compared to November 2018. On a monthly basis, German consumer prices fell by 0.8% in November 2019. Based on the European harmonized measurement method, inflation was 1.2% on an annual basis. All figures correspond to previous provisional estimates.

The 6M Euribor is unchanged at -0.33% compared to previous business day. The 10Y Swap decreased with 3 basis points to 0.08% 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.