Yesterday, the US Federal (Fed) decreased interest rates by 0.5% due to the impact of the new coronavirus, to a range of between 1% and 1.25%. With this decreased, the Fed wants to ensure that prices remain stable and that the US economy will not experience a slowdown. The Australian central bank already took a similar measure yesterday. The Australian interest rate will be lowered by a quarter of a percentage point to 0.50%. Other central banks such as the European Central Bank, the Bank of England and the Bank of Japan have already indicated that they are willing to take measures to reduce the negative effects of the coronavirus on the economy.
The European Statistical Office Eurostat reported that inflation in the eurozone decreased to 1.2% year-on-year in February, from 1.4% in January. Core inflation, excluding the impact of volatile energy and food prices, increased to 1.2% year-on-year in February from 1.1% a month earlier.
South Africa’s economy entered another recession in the fourth quarter of 2019. It is the second recession in two years. The statistical office of South Africa announced that the economy contracted by 1.4% in the last quarter, after a contraction of 0.8% in the third quarter. The disappointing economic figures increase the pressure on the South African central bank to lower interest rates in order to stimulate growth. The negative impact of the coronavirus on the country’s economy could add to this pressure.
The 6M Euribor decreased with 1 basis point to -0.40% compared to previous business day. The 10Y Swap decreased with 1 basis point to -0.21% 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.
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