Market Information Thursday 31 October 2019

The Federal Reserve (Fed) lowered its main policy rate yesterday to a bandwidth of 1.50% – 1.75%, the third decrease in a row. According to Jerome Powell, US monetary policy is now ‘in a good place’. Therefore, the Fed does not foresee any further decreases if macroeconomic indicators do not deviate far from expectations of the Fed. The interest rate decision was not unanimous; two of the twelve board members voted against the interest rate cut.

Following its policy meeting, the Bank of Japan (BoJ) announced that its monetary policy remains unchanged. This means that its policy interest remains constant at -0.1% and the purchase programmes will not be adjusted. The possibility of further reducing interest rates was kept open if economic conditions deteriorated further. The inflation forecast for the BoJ was adjusted downwards from 1.0% to 0.7% for this financial year. In addition, the forecast for economic growth was adjusted from 0.7% to 0.6%.

Destatis has published preliminary figures that show that inflation in Germany has fallen from 1.2% on an annual basis in September 2019 to 1.1% in October 2019. Economists on average expected inflation to decline to 1.0 %. Based on the European harmonized measurement method, inflation remained constant at 0.9% in October.

The 6M Euribor increased with 1 basis point to -0.34% compared to previous business day. The 10Y Swap is unchanged at 0.07% 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.