LIBOR still dropping...

inspector_monkfish

13:50 14Jul09 SWAPS: GBP Swappers Watch Curve Drift Steeper

[12:49 SWAPS: GBP Swappers Watch Curve Drift Steeper] London, July 14

GBP yields crept higher more in deference to global pressure than any
significant domestic concerns. The fall in CPI was largely discounted but the
combination of the strong showing from Goldman Sachs to its Q2 earnings and a
rise in US Retail sales and PPI placed the long end under pressure. Final terms
for the Yorkshire Water three-tranche senior secured benchmark have been set. The 10-year will be GBP275m Aug 2019 at Gilts +230 bp, the GBP200m 30-year will be marked at Gilts +200, and the GBP175m 30-year linker is set at Gilts +200 bp. HSBC, RBS and Santander are the lead managers. 2s/10s stands marginally steeper at a 201.25 bp mid point. 10s/30s is 3.25 bp flatter at a 7.5 bp mid.

inspector_monkfish

LIBORs 15th July

3mth 0.99213
6mth 1.21
12mth 1.52088

(all down around 1 1/2pts)

dattasatta

inspector_monkfish wrote: »

LIBORs 15th July

3mth 0.99213
6mth 1.21
12mth 1.52088

(all down around 1 1/2pts)

Crikey!!!
They can't go down much further can they???
Our Mortgage is 2.25% above Libor as of 1st October.
We haven't heard from the Mortgage Company yet (JP Morgan Chase).

inspector_monkfish

dattasatta wrote: »

Crikey!!!
They can't go down much further can they???
Our Mortgage is 2.25% above Libor as of 1st October.
We haven't heard from the Mortgage Company yet (JP Morgan Chase).

which LIBOR ?
i presume 3mths?

inspector_monkfish

14:27 15Jul09 SWAPS: GBP Curve Makes Parallel Shift as Yields Creep Higher

[13:27 SWAPS: GBP Curve Makes Parallel Shift as Yields Creep Higher] Ldn, Jul 15

GBP yields crept higher as the unemployment gloom was shrugged aside by the stock market recovery. Equities have been on a strong footing after the Goldman Sachs figures. The earnings season is gathering a head of steam with JP Morgan Chase results due tomorrow. Consternation as to the timing of when or whether the MPC will increase and or resume the QE programme appears to be diluted now with the next round of buying occurring later today in the form of GBP2.25bn medium dated assets. Swappers have been sat on their hands ever since the data. Short sterling players did contend with some modest duration grab around the belly of the curve around lunchtime when one British name paid 5-year but volumes are generally weak. 2s/10s stands at a 204 bp mid with 2s/5s unchanged at 142.5 bp.

crispy2_2

I've just posted a copy of Ray Boulger's latest blog post, here.

In this post, Ray Boulger describes how fixed rates are becoming much more expensive than swap rates would suggest, and talks about the premium between fixed rate mortgages and tracker mortgages. He says that the premium is so large now that fixed rates no longer look good value.

inspector_monkfish

LIBORs 16th July

3mth 0.969
6mth 1.19775
12mth 1.5065

all down between 1 and 2pts again

Jacka87

So Ray boulger reckons we should all remain on trackers etc, wonderful. Now I really do need to go back to the drawing board!

I do think its a disgrace that the banks have let the premium get so high! I used to think that if BOE base rate moved so did mortgages, but then I was told it was LIBOR and then Swap rates if you are on a fixed. Now it seems its clear the banks will put costs up if anything moves upwards. But when it comes to moving them down, well suddenly the mortgage rates are linked to a new thing that is only ever rising! Convinient! Soon they will be saying rates are rising cos of global warming, that will be an excuse to keep them rising for a bit!

foreversummer

Ray Boulger, it seems, changes his mind with the wind (or when it suit his pocket). Less than one month ago, he was urging all borrowers, including those with very low rate trackers to fix without delay. He even went into quite some detail about how difficult it was for someone with a very low margin tracker to give up such a rate, but urged them to do so as they would really lose out if they did not.

Thank goodness I did not give up my tracker. I hope no-one else took his advice. You'd be feeling pretty sick at the moment if you did.

Foreversummer

crispy2_2

foreversummer wrote: »

Ray Boulger, it seems, changes his mind with the wind (or when it suit his pocket). Less than one month ago, he was urging all borrowers, including those with very low rate trackers to fix without delay. He even went into quite some detail about how difficult it was for someone with a very low margin tracker to give up such a rate, but urged them to do so as they would really lose out if they did not.

I haven't seen that post, would you be able to point me at it? I did see one dated 20th April, but that said if you were on a very low rate tracker you should not rush to fix.

Thanks!