Market Information Tuesday 19 May 2020

The first phase of an an experimental corona vaccine yielded hopeful results. Pharmacist Moderna reported that all 45 subjects participating in the Phase 1 study developed antibodies that could ‘neutralise’ the virus. The vaccine, called mRNA-1273, is also relatively safe and caused minor side effects, according to the pharmacist. The next phase of the trial is expected to start in July. If the vaccine eventually proves itself useful, it can get approval from the U.S. health authorities relatively quickly.

These promising test results and the easing of corona measures in many countries created optimism among investors and spurred hopes of an economic recovery in the second half of the year. The AEX index closed 3.9% higher at 519.89 points. The stock exchanges in London, Paris and Frankfurt have also increased substantially. In the US, the Dow-Jones index closed 3.9% higher, the S&P 500 rose 3.2% and the Nasdaq won 2.4%.

Market doubts about validity of the European Central Bank’s (ECB’s) buy-back programme caused the central bank repurchase more, which could already lead to an early termination of the programme, according to chief economist Gilles Moëc of asset manager and insurer AXA Group. Moëc refers to the “vicious circle” in which the ECB is trapped. Moëc estimates that at the current pace the ECB will reach the limit of its EUR 750 billion Pandemic Emergency Purchase Programme (PEPP) before the end of the summer.

The 6M Euribor increased with 1 basis point to -0.13% compared to previous business day. The 10Y Swap increased with 3 basis points to -0.13% 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.