Market Information Thursday 25 February 2021

Credit rating agency Moody’s adjusted its forecast for the Eurozone’s economic growth. Previously, Moody’s expected a growth of 4.7% over 2021, but this has now been adjusted to 3.7%. This is mainly due to the strict lockdowns that are still in effect in many European countries, which are taking longer than first expected. While the UK’s growth rate was also revised downwards, figures for the Chinese and US economies were set higher this time. The growth rate of the latter was previously estimated at 4.2%, but has been adjusted to 4.7%. Moody’s further expects the combined economies of the G20 to grow by 5.3% over 2021.

The extensive support package presented by President Biden has garnered the support of 150 top American executives. In a letter, executives from Goldman Sachs, Google, IBM and American Airlines, among others, express their support for the 1.9 trillion-dollar package. The letter calls on Congress to quickly approve the aid package. It would be needed to “set the economy on course for a strong and sustained recovery.”

The commodities market is off to a spectacular start in 2021 and some analysts are now talking about a so-called “super cycle.” In such a cycle, prices continue to rise for years as supply lags structurally behind demand. Drivers of this trend are, among others, the fear of high inflation and a sharply rising demand for various metals. These are necessary for the production of renewable energy generators, such as solar panels and wind turbines. The previous super cycle occurred with the meteoric rise of China at the turn of the century. According to most market followers, however, it is far too early to say whether we are in a super cycle this time.

The 6M Euribor is unchanged at -0.52% compared to previous business day. The 10Y Swap increased with 1 basis point to 0.01% compared to previous business day.