Market Information Thursday 26 March 2020

According to Bloomberg, European authorities are considering several measures to assist banks dealing with potential bad loans as a result of the coronavirus. One option under review is to temporarily suspend a portion of accounting rules known as IFRS9. Another possibility under consideration is the extension of a transition period that was agreed before 2018. In short, this implies that banks get more time to comply with capital demands, without cutting dividends to shareholders. EU officials will further discuss the different options this week.

The volume of world trade decreased by 1.2% in January 2020 in comparison to December 2019. This is shown by figures from the Dutch bureau for Economic Policy Analysis (CPB) in the monthly World Trade Monitor. In December the world trade increased, with a revised 0.4%. The CPB emphasizes that the monitor does not show the current situation, but the situation of two months ago. In January, the spread of the coronavirus was still limited and the consequences of the coronavirus unknown.

Fed-president James Bullard of the central bank in St. Louis anticipates millions of unemployed by the coronavirus. Measures to control the spread of the coronavirus in the United States could put up to 46 million Americans out of work in the short term. According to Bullard, the economic shock in the US will be short if policymakers quickly come up with emergency economic aid, such as income support. Earlier this week an agreement was reached in the US on a comprehensive support package.

The 6M Euribor is unchanged at -0.31% compared to previous business day. The 10Y Swap increased with 4 basis points to 0.12% 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.