Navigation

Blog

Rates Update

May 25, 2017  /  In Weekly Market Updates

Last Week's Market Moves: A flattening curve cuts the "cost" of fixing interest rates. The 10T is back below 2.30% and swap spreads are negative. The mid market 10year swap rate is 2.21%, 7bps lower than the Treasury.  3mo Libor is 1.19% and so the 10 year pay-up to fix is 100bps, the 5 year pay-up is 70bps. FOMC minutes show the Fed is ready to hike again and will begin shrinking its balance sheet this year - which will likely lead to higher rates.  Current rates of...
Continue Reading
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...
Continue Reading
Click continue reading to view our infographic.
Continue Reading
Click continue reading to view our infographic.
Continue Reading

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  ...
Continue Reading
Click continue reading to view our infographic.
Continue Reading

Where's the Rate Risk?

September 22, 2015  /  In The Fed 2015

Click continue reading to view our infographic.
Continue Reading
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...
Continue Reading
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...
Continue Reading