Market Information Wednesday 1 April 2020

The Federal Reserve has taken new measures to increase access to dollars worldwide and decrease market volatility. It opens a temporary repo facility for foreign central banks to exchange US government bonds for dollars and then distribute the money to local banks. In recent weeks, a run on dollars started because businesses took out credit rapidly and investors liquidated their positions. The facility, available on April 6, aims to prevent (central) banks from selling their government bonds in order to receive dollars.

Stock exchanges in the US ended lower again on Tuesday after a total increase of 17% in the seven trading days before. The Dow-Jones index fell 2 percent to 21,888 points and the S&P fell 1.7 percent to 2,582 points. Due to the large losses on Wall Street since mid-February, the Dow Jones has experienced its worst first quarter since 1938. In Europe, the Stoxx Europe 600 index has fallen by 24 percent since the beginning of 2020.

US President Donald Trump announced his plans for a $2 trillion infrastructure plan on Tuesday evening. These investments should not only improve infrastructure but also increase employment. Currently, unemployment in America is forecasted to rise even faster as a result of the corona crisis than economists at Goldman Sachs previously expected. The investment bank expects unemployment to reach 15 percent in the second quarter.

The 6M Euribor is unchanged at -0.28% compared to previous business day. The 10Y Swap increased with 2 basis points to -0.02% 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.