Interest Rate Cap Premiums at 4-year lows: A Strategic Opportunity for Borrowers?
Similar to home or car insurance, Interest Rate Caps provide protection for borrowers against loss in return for the payment of a premium. The good news for borrowers is that Cap premiums are falling. In this article we explore why borrowers should be paying attention Two of the primary factors influencing the cost of Cap […]
SONIA & EURIBOR can pivot quicker than borrowers can respond
Summary Central Banks in the US (Wednesday), UK and Europe (both Thursday) meet this week All are expected to leave their policy rates unchanged Hedge pricing has improved as markets are pricing in rate cuts for 2024 Central Bank statements and Financial Markets pricing continue to diverge The US Fed, Bank of England and ECB […]
Historical high for Euribor- but for how long?
Summary The ECB has raised its official Depo rate to a historical high of 4.0% This is expected to be the terminal rate but is data dependent The focus has now shifted to how long rates will remain at this level At this stage of the rates cycle, a more nuanced approach to hedging is […]
Euribor 3-month rate set to increase further
Euribor 3 month and Euribor Swap Rates Continue to Climb The European Central Bank (ECB) has raised interest rates by 425 basis points since last summer to 3.75%, the highest level since 2009. The 3-month rate, which influences the pricing of variable rate loans, is at 3.701% – the last time it was at this […]
ECB raises rates again by 0.75%. Another 0.50% expected in December
ECB keeps up the pace with another 0.75% rate hike The ECB held its regular monetary policy meeting today and decided to raise official interest rates by another 0.75%, taking cumulative rate hikes since July to 2.0%. In previous cycles, it took 18 months to tighten policy by this magnitude, making this by some margin […]
Central Banks poised to tighten
Central Banks are poised to hike interest rates The pressure on Central Banks to raise official interest rates is gaining momentum. Inflation hasn’t been this high for a decade or more and has triggered a noticeable shift in rhetoric from all Central Banks, most recently from the Bank of Canada. Last week, the Canadian central […]