Market Information Thursday 16 June 2022

The European Central Bank (ECB) scheduled an emergency meeting yesterday. In the meeting it was decided that proceeds from maturing purchased bonds will be flexibly reinvested in order to keep interest rate spreads in the Eurozone under control. The reason for this is the fact that in recent days the differences between German debt and Italian debt rose sharply. For example, Italian interest rates rose above 4%. By reinvesting maturing bonds primarily in notes from countries where the risk premiums are rising too fast, the ECB hopes to moderate the rise.

The U.S. Federal Reserve has raised the key interest rate by 75 basis points. This was announced by the US central bank last night. It is the strongest increase since 1994. The federal funds rate is now raised to a range of 1.50% – 1.75%. In March the interest rate was already raised by 25 basis points and in May rates were increased with 50 basis points.

The Eurozone experienced a substantial trade deficit again in April, according to Eurostat. In April 2022, total exports were EUR 224.0 billion, up 12.6% from April last year. However, total imports rose much faster, by 39.4% to EUR 256.4 billion. As a result, the Eurozone had a trade deficit of EUR 32.4 billion in April this year. This compares to the trade surplus of EUR 14.9 billion in April 2021.

The 6M Euribor increased with 7 basis points to 0.18% compared to previous business day. The 10Y Swap decreased with 17 basis points to 2.45% 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.