Market Information Tuesday 21 July 2020

In Brussels, European heads of government agreed on the next seven-year budget with an associated post-corona recovery package. This was announced this morning by the President of the European Council, Charles Michel, after four days of negotiations. The plan provides for a budget for 2021-2027 of EUR 1,074 billion in total and a post-corona recovery package of EUR 750 billion. EUR 390 billion of the recovery package will be provided through subsidies to Member States and the remainder will be distributed through low-interest loans. In addition, an emergency brake procedure has been initiated to allow one Member State to suspend payments from the recovery package to another if promised reforms in areas such as pensions and the labour market are not implemented.

The Chinese government is considering retaliation against two major European network equipment manufacturers, Nokia and Ericsson, if more European countries decide to ban Huawei equipment. This is reported by The Wall Street Journal based on insiders. China is considering strict export controls, which would make it much more difficult for Nokia and Ericsson to export products they manufacture in China to other countries.

German Federal Statistical Office reports that producer prices in Germany in June remained unchanged from the previous month. Economists expected an increase of 0.2%. In May, the prices charged by German manufacturers for their products decreased by 0.4%.

The 6M Euribor is unchanged at -0.35% compared to previous business day. The 10Y Swap decreased with 2 basis points to -0.20% 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.