Market Information Wednesday 22 April 2020

German investor confidence has risen sharply, according to the ZEW index measurement published yesterday. The expected reading for the index was -42.0 but the index climbed from -49.5 to 28.2. According to ZEW President Achim Wambach financial experts see light at the end of the tunnel. Investors are confident that the German economy will grow again in the third quarter of 2020 as a result of easing restrictions to limit the corona virus. The economic outlook in the wider euro area also improved sharply, ZEW’s report showed.

Central banks’ balance sheets are expanding at record rates, raising the question how extensive the buyback programs can be and whether these acquired assets can eventually be sold back to the market. Central banks of the G7 countries jointly bought $ 1.4 trillion of financial assets in March, nearly five times as much as the previous record in April 2009, according to an analysis performed by Bloomberg Economics. Morgan Stanley analysts estimate that the Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England will have expanded their balance sheets by a cumulative $ 6.8 trillion at the end of the corona crisis.

The fall of the oil price below zero on Monday also caused turbulence in the financial markets on Tuesday. June forward contracts fell 43 percent on Tuesday, closing below $ 12 a barrel for WIT. Trump’s administration pledged to help the U.S. energy sector with a stimulus package and other measures. “We are taking very aggressive but appropriate steps to help the industry,” said Energy Secretary Dan Brouillette. Current negative oil prices also have possible negative consequences for banks and traders causing potentially significant losses.

The 6M Euribor increased with 1 basis point to -0.19% compared to previous business day. The 10Y Swap increased with 5 basis points to 0.00% 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.