Market Information Wednesday 15 April 2020

IMF’s chief economist Gita Gopinath presented the World Economic Outlook in Washington on Tuesday. The International Monetary Fund predicts that the global economy will shrink by 3 percent this year and that the damage could be even greater if the pandemic lasts longer. This is a significant adjustment compared to the 3.3 percent growth forecast for 2020 published in January. The calculations show that the economies of rich countries are hit hardest. The Eurozone is forecast to contract by 7.5 percent in 2020 and the US economy by 5.9 percent. The Chinese economy is not shrinking, but the forecasted growth is unprecedentedly low at 1.2%.

Despite last weekend’s ‘historic agreement’ to reduce oil production to stabilize prices, oil prices reacted Tuesday with a drop of 4.2 percent to $ 30.17 a barrel. In the World Economic Outlook, the IMF also expects relatively low oil prices in the coming years as a result of the corona crisis. It is estimated that a barrel of Brent oil will not exceed $ 45 until the end of 2023. Saudi Arabia also seems to be increasing oil production before the deal will be effective on May 1st and analysts indicate that oil storage capacity in the US has almost reached its limit.

Investor pessimism regarding the economic impact of the pandemic has reached “extreme” levels, according to the Bank of America survey. Cash levels rose from 5.1 percent in March to 5.9 percent in April, the highest level since the 9/11 attacks. The fund managers believe that credit risk is the greatest threat to the financial markets.

The 6M Euribor increased with 2 basis points to -0.18% compared to previous business day. The 10Y Swap decreased 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.