Market Information Tuesday 23 February 2021

Confidence of German businesses in the economy has risen sharply in February. The IFO-rating, the index measuring business confidence, climbed to 92.4 points from 90.3 a month earlier. This is the strongest monthly increase since July 2020. In particular the German services sector, which includes the hospitality and the retail sector, and the industrial sector showed optimism due to rising vaccination rates and increasing hopes that the lockdown will soon come to an end.

Turkey risks being blacklisted as a tax haven unless it gets its records in order before May 31 this year. Early last year, Turkey was reprimanded by the EU over problems concerning the automatic exchange of tax information with EU member states. Turkey had until December 31, 2020 to get things in order, but due to various administrative delays, this was not achieved. Although some countries, including the Netherlands, were of the opinion that Turkey should be blacklisted starting in January, the deadline was extended to May 31st. Although the blacklist has no direct impact, this “pillory” can serve as an effective means of pressure to bring about tax reforms.

Prime Minister Johnson of the United Kingdom announced an exit strategy last night to lead the British out of lockdown. At the earliest, all measures will be off the table by June 21st. The UK is far ahead of the rest of Europe in terms of the number of vaccinations already administered. Data from February 20th shows that 25.9% of the total UK population has received at least one dose of a vaccine. By comparison, France and Germany stand at 3.8% and 4.0% respectively. In four steps, each with a four-week interval, the Prime Minister wants to lead the British to, as he himself called it, ‘the seasons of hope’. Although Germany is behind the UK, Chancellor Merkel also seems to have a concrete plan for easing. Where European stock markets showed losses due to rising interest rates on government bonds and notes, the hope of such easing caused a little more optimism in the stock markets.

The 6M Euribor is unchanged at -0.52% compared to previous business day. The 10Y Swap decreased with 3 basis points to -0.01% 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.