Market Information Thursday 31 March 2022

The European Central Bank (ECB) will gradually adjust its monetary policy and only raise interest rates sometime after the bond buying programme has ended. ECB President Christine Lagarde confirmed this on Wednesday. The buying programme will be stopped in the third quarter, if the inflation expectations remain as high as they are now. The ECB expects that the war in Ukraine will further increase inflation and that economic growth will slow down. In addition, energy prices are said to remain high for a longer period. Inflationary pressures on food prices are also likely to increase. Russia and Ukraine produce almost 30% of world wheat exports, while Belarus and Russia produce about a third of world potash production, which is an important raw material for fertilisers.

Consumer confidence in the eurozone continued to fall, in line with expectations, in March. This was shown Wednesday by figures from the European Commission. The index that reflects the confidence, is at 18.7 negative in March. In February this was 8.8 negative. The expectation of economists for March was also 18.7 negative. Economic sentiment also deteriorated. The index fell from 113.9 to 108.5.

The American economy grew slightly less fast in the fourth quarter of 2021 than previously reported. This became apparent on Wednesday from a final estimate by the US Department of Commerce. The gross domestic product (GDP) increased in the fourth quarter by 6.9% on an annual basis. In the previous estimate, a growth of 7.0% was reported. This downward revision was due to slightly lower exports and consumer spending. In the third quarter of 2021, growth in the US economy slowed to a revised 2.3%. This will also bring growth for the whole of 2021 to 5.7%, compared to a contraction of 3.4% in 2020. The PCE price index rose from 6.3% to 6.4% in the fourth quarter, while the core price index, which excludes food and energy, remained at 5.0%.

The 6M Euribor increased with 1 basis point to -0.38% compared to previous business day. The 10Y Swap increased with 3 basis points to 1.28% 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.