Market Information Wednesday 12 August 2026

Persistent heat and drought are weighing on European growth through weaker labour productivity, transport disruptions and rising energy and agricultural costs. One analysis estimates the economic damage at around 1% of EU GDP, or €180bn, effectively offsetting the growth expected for 2026. Economists warn that climate risks remain largely absent from forecasting models even as supply security becomes increasingly important.

Investors are focused on the latest US inflation report, which could prove pivotal for the Federal Reserve’s September interest rate decision. Economists expect consumer prices to rise 0.1% month on month, with annual inflation easing to 3.4%, while core inflation is projected to remain at 2.5%.

Yen traders are stepping up options activity ahead of US inflation data as uncertainty over the interest rate outlook and the dollar’s direction persists. One week dollar yen implied volatility rose for a second consecutive day, while the exchange rate recently fluctuated between roughly ¥155 and ¥160 per dollar. Investors are seeking both downside protection and upside exposure, signalling a divided market and expectations of heightened currency swings.

The 6M Euribor decreased with 2 basis points to 2.66% compared to previous business day. The 10Y Swap decreased with 3 basis points to 3.18% 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.