The market sentiment is mixed, but there are still interesting movements on the market.
Germany has its debt reduced to the lowest level since 2011
In the first half of 2018, Germany managed to reduce its overall public debt by up to 2.3% to about 1.93 trillion euros or $2.27 trillion, thus pushing this stuff to the lowest value since 2011. That’s what data disclosed on Wednesday.
There’s no doubt that sustained economic surge appears to be a long-awaited gift for the German government due to the fact it actually enjoys a budget surplus. Well, the given surplus gives the German authority an excellent opportunity to have public spending raised even without taking another borrowing.
The debt of all state levels, with the federal government, up to the country’s 16 federal states, social security systems, and municipalities headed south by nearly 46.5 bln euros in contrast with January through June year-on-year. That’s what the Federal Statistics Office uncovered.
As a matter of fact, chancellor Angela Merkel's cabinet had debt cut by about 1.7% to the outcome of about 1.22 trillion euros and the 16 federal states reduced debt by approximately 3.6% to nearly 574.5 billion euros. Besides this, debt of the social security systems went down by approximately 7.1% hitting 403 million euros.
The previous week Germany had its debt issue plans trimmed for the fourth quarter by nearly 2 billion euros or $2.34 billion. It’s apparent that the shrinking debt poses a serious challenge for the European Central Bank, which is going to discuss how it’s going to reinvest funds accumulating from government bonds under its asset purchase initiative, which mature in 2019.
Aside from that, market participants are also eager to know whether the EU’s primary financial institution is going to deviate from its current regulations and proceed with its slow buying in Germany, exactly where it’s approaching a self-imposed debt cap.
The market sentiment has switched to risk-on, driving upwards stocks and riskier currencies and weighing on the US dollar.
Optimistic vaccine news improved market sentiment. Stocks and riskier assets are rising, while the US dollar is dipping down. Let’s have a closer look.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.