Market Information Tuesday 16 July 2024

Investors increasingly anticipate Donald Trump’s re-election as U.S. President. Market analysts hold this view after the assassination attempt on the Republican presidential contender at a campaign event this weekend. Commentaries suggest Trump’s chances in the November elections have improved. Known for his support of looser fiscal policies and higher import tariffs, Trump’s policies are expected to benefit the dollar and raise U.S. government bond yields. Markets had already been boosting the dollar in anticipation of Trump’s re-election and investors are preparing for a steeper U.S. interest rate curve.

The number of U.S. companies filing for bankruptcy in June exceeded early pandemic levels. An S&P Global Market Intelligence report noted 75 filings in June, up from 62 in May and higher than the 74 peak in July 2020. The year-to-date total of 356 is the highest in 13 years. Contributing factors include high interest rates, supply chain issues, and declining consumer spending. Citi highlighted the “Sahm Rule” recession indicator, which might trigger in August if unemployment rises. Claudia Sahm, its creator and former Federal Reserve economist, warned that delaying rate cuts could push the economy into a recession.

China’s new home prices fell in June at the fastest rate in nine years, while property sales and investments are also dropping, increasing pressure on policymakers for further stimulus. Prices dropped 4.5% from a year earlier, the lowest since June 2015 and exceeding May’s 3.9% decline, according to NBS data. Since 2021, the steep downturn in the property market has caused numerous developer defaults and left many construction sites idle, eroding confidence in a sector traditionally seen as a safe haven by Chinese households.

The 6M Euribor decreased with 2 basis points to 3.66% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.74% 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.