Market Information Wednesday 2 October 2019

The Ministry of Raw Materials of Ecuador has announced that the country will leave OPEC as of January 1, 2020. The South American country is a relatively small member of the oil cartel and wants to be able to produce more oil to strengthen its financial position. As a member of OPEC, the country is now bound by production restrictions that aim to raise oil prices. The country is a member of OPEC from 2007.

Research firm ISM has reported that industrial activity in the United States has fallen in September 2019 compared to a month earlier. The PMI index fell from 49.1 in August to 47.8 in September. Economists expected on average an increase to 50.0. The decrease is partly due to the continuing trade tensions with China and the cooling global economy. The underwhelming figures may cause the Fed decide to further lower interest rates in the US.

The World Trade Organization (WTO) has indicated that it expects global trade growth to reach 1.2% in 2019. This is considerably lower than the 2.6% that was still expected in April 2019. According to WTO Director-General Roberto Azevêdo, the worsening prospect of world trade is caused, among other things, by the increasing uncertainty among entrepreneurs as a result of the US-China trade rate, the approaching Brexit and the slowing global economic growth.

Today, the European Central Bank has started the transition to a new short-term reference rate. The new interest rate, which has been given the name €STR, reflects the overnight borrowing costs of banks within the European Monetary Union. This reference rate will replace the EONIA rate in the future. The first fixing of the rate, which was published by the ECB on October 2nd, is -0.549%.

The 6M Euribor decreased with 1 basis point to -0.39% compared to previous business day. The 10Y Swap is unchanged at -0.15% 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.