If countries declare lockdowns again for a second corona wave, Dutch exports will be hit hard, according to Netherlands Bureau for Economic Policy Analysis (CPB) and Statistics Netherlands (CBS). According to the CPB, the consequences for the transport and industry sectors are underexposed. Based on World Trade Organization (WTO) scenarios, the CPB looked at the consequences of global lockdowns of three, six and twelve months. A period of three months is similar to the measures taken between March and May. In that scenario, the added value of transport, the electrical engineering industry and machine building decreases by 7% to 13%. With a lockdown of six months, the effects will double, -13% to -24%.
The Chairman of the Federal Reserve, Jerome Powell, warned on Tuesday that the recovery of the US economy will be in trouble if additional government support is not provided soon. According to Powell, the risk of doing too much is less than the risk of doing too little. The chairman of the Federal Reserve thus looks more in agreement with the Democrats than the Republicans in U.S. Congress. The two parties have not yet been able to make a decision on a new bailout package. Powell emphasized in his speech that monetary and fiscal policies must together ensure a strong and swift recovery.
Global trade in goods is decreasing significantly this year, but not as much as initially thought. This is because trade picked up strongly again in June and July, according to the World Trade Organization (WTO). The WTO now assumes that the volume of goods traded worldwide this year will be 9.2% lower than in 2019. The organization previously predicted the contraction due to the corona crisis at 12.9% in the best case. However, the recovery in world trade in 2021 is likely to be slower than the organization predicted in April. For next year, the WTO is expecting an increase in world trade of 7.2% against a previously predicted increase of 21.3%.
The 6M Euribor decreased with 2 basis points to -0.49% compared to previous business day. The 10Y Swap is unchanged at -0.22% 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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