Market Information Monday 5 February 2024

Global credit spreads are surging, experiencing the largest weekly increase in four months due to concerns over the real estate markets. Banks are raising bad-loan provisions, causing corporate bond spreads to widen, particularly in the US and Asia, as higher interest rates exert downward pressure on commercial property values. Analysts recommend adding hedges to credit portfolios in response to the growing negativity and risks in the market.

In January, prices of basic food items such as grains and meat decreased, with more than 10% compared to the previous year. Abundant grain harvests and ample corn stocks led to competition and price drops. Conversely, the sugar price rose due to drought in key producing countries. Changes in world food prices do not directly influence prices in Dutch supermarkets due to longstanding price agreements between sellers and producers. However, prolonged low prices could eventually impact grocery costs.

Chinese investors and households turned to gold amid local property and stock market turbulence, causing record-high prices. China led global gold jewelry and investment flows in 2023 amid disappointing markets post-Covid lockdowns. Strong central bank demand and a 28% rise in Chinese investment offset Europe’s decline. Analysts highlight Chinese demand as a key, underappreciated factor in gold price trends.

The 6M Euribor decreased with 1 basis point to 3.83% compared to previous business day. The 10Y Swap increased with 8 basis points to 2.63% 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.