Market Information Thursday 27 August 2020

The Federal Reserve (Fed) will ease its inflation policy. In addition, the Fed will be more tolerant of higher inflation according to chairman Jerome Powell at the annual symposium of the central bank. Powell said that the Fed will aim for an inflation rate that fluctuates on average around 2 percent. This implies room for an inflation rate that may exceed that level for certain periods. The Fed previously set an inflation target of exactly 2 percent. In recent years, however, the percentage has been well below that level.

Based on a second estimate the American government reports that the economy of the United States contracted less in the second quarter than previous figures had indicated. The downturn is estimated at 31.7 % against an earlier estimated decline of 31.9 %. On average, economists expected a decline in gross domestic product (GDP) of 32.5 %. The decline is still the strongest decline in GDP since the measurements started.

Statistics Netherlands (CBS) has reported that producer confidence increased again in August 2020. The index that measures confidence increased to minus 5.4 in August from minus 8.7 in July. The greatest improvement came from the order book and stocks of finished products. In addition, Statistics Netherlands announced that producer prices were on average 4.9 percent lower in July 2020 than a year earlier.

The 6M Euribor is unchanged at -0.44% compared to previous business day. The 10Y Swap increased with 2 basis points to -0.14% 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.