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Rates Update

July 18, 2018  /  In Weekly Market Updates

Last Week's Market Moves: Following last weeks strong employment report, Industrial Production rose in June ( +.6% ) driven mainly by gains in manufacturing and mining. Strong industrial production and retail sales together with smaller trade deficits in April and June suggest the U.S economy is accelerating sharply in the second quarter. The housing market index held steady in July at 68 but still off from its highs in the low 70's. Some economists are forecasting GDP gr...
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So many community banks face an uphill challenge to negotiate pre-pay penalties into their commercial loan agreements.  This can make hedging fixed rate loans difficult given the need to qualify for hedge accounting.  In this month's Pro Shop presentation from Country Club Bank Capital Markets Group we explore options to hedge risk, even where a pre-pay penalty is not an option.  http://ow.ly/XPhpT...
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Beyond Two Standard Deviations

November 12, 2015  /  In Rates

The convergence of Central Bank action (US Fed rate shift, Swiss currency re-valuation, China, ECB QA etc.), regulatory changes to bank capital requirements and declining bond market liquidity will bring high levels of volatility to the markets.  The attached report from Bloomberg hightlights 5 structural shifts that have already impacted the Rates market and which point to heightened volatility in the next 12 months.http://ow.ly/UyLJU  ...
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Where's the Rate Risk?

September 22, 2015  /  In The Fed 2015

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1) Global Volatility; 2) Strong Dollar impact on exports; 3) no hike priced in swap curve; 4) Lockhart, Dudley & Williams wavering; 5) there's still October and December; 6) Fed can still get its way before year end; 7) inflation remains dormant. 7 compelling reasons for a Fed no show in September.  http://bloom.bg/1KELeZL...
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Over the next few months you will hear a lot of noise about new requirements for posting margin on swaps.  Initial Margin; Variation Margin; Uncleared Swaps; these are terms that will have a significant impact on the cost of doing business for swap dealers, major swap participants (hedge funds and major non bank institutions), but the vast majority of community banks and end users have nothing to worry about.  The "margin storm" is set to pass by leaving all but the largest community banks unt...
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