The Japanese central bank has lowered its forecast for the economy. The bank’s policymakers expect the economy to decrease by 5.5% this year, compared to 4.7% previously. The decrease is caused by declining exports, which are much lower due to the corona virus. The Bank of Japan expects an economic recovery for next year. Gross domestic product (GDP) is expected to increase by 3.6% in 2021.
Banks in the eurozone restrict funding for companies and families to borrow money. This is evident from the Bank Lending Survey of the European Central Bank, a quarterly report based on a survey conducted at the beginning of this month among nearly 150 banks. The Survey shows that banks are bracing for defaults due to the economic impact of the corona pandemic. The institutions already tightened their credit conditions in the third quarter and indicated that they will continue this policy in the fourth quarter. Banks ask companies for considerably more collateral for a loan. The effects of these tightened credit conditions can already be seen. The ECB reported on Tuesday that monthly lending to businesses was negative for the first time since September 2019 last month.
Import prices in Germany increased by 0.3% in September 2020 compared to a month earlier. On an annual basis, the import prices decreased by 4.3% in September.
The 6M Euribor decreased with 1 basis point to -0.51% compared to previous business day. The 10Y Swap is unchanged at -0.28% 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.
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