Market Information Wednesday 3 June 2020

According to the risk report on financial markets published on Tuesday by the Netherlands Bureau for Economic Policy Analysis (CPB) a persisting recession can result in a new euro crisis. Additional government spending and rising debt of corporates, financial institutions and governments would be  more difficult to control. Despite the fact that the Dutch banks are more resilient than in 2008, the magnitude of the shock can cause significant financial problems for companies and households and will ultimately have consequences for financial institutions. Initial stress tests on the financial buffers of Dutch SMEs show that these companies will need extra liquidity on top of the existing government support provided in the event of a turnover shock of six months.

New quarterly figures for business services sales report a 2 percent increase in the first quarter of 2020 compared to the same quarter a year earlier, according to Statistics Netherlands (CBS). The reported sales growth is the lowest in years. Most industries generated higher sales in the first quarter despite corona measures coming into effect in March. However, sales for the travel industry in the first quarter were already 19.2 % lower than in 2019. Advertising and the temporary employment sector also showed a lower level of sales compared to the previous year.

The European Central Bank purchased 235 billion euros in total in debt securities until the end of last week. Both Italy and Spain received a relatively high proportion of support from Frankfurt, according to the statistics on the PEPP purchase program. The bank deviated from the so-called capital key, the share that each country has in capital with the ECB.

The 6M Euribor is unchanged at -0.16% compared to previous business day. The 10Y Swap increased with 1 basis point to -0.09% 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.