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Rates Update

September 7, 2018  /  In Weekly Market Updates

Last Week's Market Moves: The August jobs report was released today. Nonfarm payrolls rose 201,000 from the prior month, exceeding the forecast of 190,000 jobs. The unemployment rate was unchanged at 3.9 percent, still near the lowest levels since the 1960's. What stands out in this report was American wages unexpectedly climbed last month by the most since the recession ended in 2009. Average hourly earnings for private workers increased 2.9%, exceeding all estimates....
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Dimon Warns of 5% 10 Year

August 6, 2018  /  In Rates

Jamie Dimon:  "You better be prepared to deal with rates 5% or higher - it's a higher probability than most people think"  https://www.bloomberg.com/news/articles/2018-08-06/dimon-doubles-down-on-higher-u-s-yields-call-with-5-warning...
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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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