LIBOR still dropping...

inspector_monkfish

cbrpaul wrote: »

give or take a few weeks :rotfl:

OH I see... now you want to start moving the goal posts....

RomansProperties

inspector_monkfish wrote: »

3mth Libor down a tic to 1.58438

Inspector - your insight is welcome

I also value your opinion
I have 5 buytolet mortgages going onto LIBOR plus deals, the first started on 1st April and they are all on the LIBOR deal by sept
I am keeping an analysis week by week of what the new rates would be and its starting to look very good.
1 property was on at a rate of 5.3% and now I am looking at 3.08%.
Do you see the LIBOR rate getting back to 50points above the base rate rather than 108 at the moment?

inspector_monkfish

RomansProperties wrote: »

Inspector - your insight is welcome

I also value your opinion
I have 5 buytolet mortgages going onto LIBOR plus deals, the first started on 1st April and they are all on the LIBOR deal by sept
I am keeping an analysis week by week of what the new rates would be and its starting to look very good.
1 property was on at a rate of 5.3% and now I am looking at 3.08%.
Do you see the LIBOR rate getting back to 50points above the base rate rather than 108 at the moment?

Hi Rom

Not sure about it getting back to 50bp, but can only get better day by day by 1 or 2bp each day for the next few weeks.

RomansProperties

inspector_monkfish wrote: »

Hi Rom

Not sure about it getting back to 50bp, but can only get better day by day by 1 or 2bp each day for the next few weeks.

Whats your thoughts on Thursday?
As long as it does not start going up for a while thats all I am bothered about.
Not much point re fixing deals at the moment for 2 years as after that the rates will prob be much higher.

I know crystal ball time but where do you see rates in 2/3 years?

inspector_monkfish

RomansProperties wrote: »

Whats your thoughts on Thursday?
As long as it does not start going up for a while thats all I am bothered about.
Not much point re fixing deals at the moment for 2 years as after that the rates will prob be much higher.

I know crystal ball time but where do you see rates in 2/3 years?

Thursday looks like its going to be a pointless event really.
Although surprisingly, according to a Reuters Poll, they are showing a 28% chance that the rate will be cut to 0.25pct. Can't see that happening myself though.

Probably be a bit of waffle about how the QE is going, and then Merv and his mates will all be off down the pub for a few pints of Bombardier!

3mth Libor is today forecast around 1.57, another tic lower than yesterday. (107pts over base)

The lowest 3mth Premium in the past 12mths cycle of rate cuts, was early Jan, immediately before the Jan 50bp rate cut, when it got down to just 50pts.
But remember, just last October we had a premium of 177pts!! :eek:

So hanging around 100pts seems to be a happy medium for a while, as it continues to tic down a point or 2 each day.

inspector_monkfish

Just for your info, 3mth Libor may be around 1.57/58 level, but 3mth money is actually exchanging hands in the InterBank market about 10pts lower than that, around 1.48.

michaels

Any explanation for this?

inspector_monkfish wrote: »

Just for your info, 3mth Libor may be around 1.57/58 level, but 3mth money is actually exchanging hands in the InterBank market about 10pts lower than that, around 1.48.

inspector_monkfish

michaels wrote: »

Any explanation for this?

happens all the time in the markets, its nothing new.

it would seem that the Bank that wants to borrow the 3mth money believes that the Libor is too high, and he is therefore only prepared to bid lower than Libor.

The Bank that is offering the money, realises this and is therefore quite happy to offer lower.

I would imagine the bidding Bank prob started with a bid around 1.45, and the offering Bank around 1.50, and they have eventually agreed to meet somewhere inbetween (at 1.48 in this case)

It is sign that 3mth Libor will most probably continue to ease.

Equally, if it is apparant that Libors, or the BOE rate are going to move higher, you may find InterBank Depos trading above Libor in certain periods.

inspector_monkfish

New 3mth LIBOR set at 1.57375

michaels

Interesting - I had always thought that Libor was in effect a summaryt of what had happened in the market that morning rather than an instrument in its own right

inspector_monkfish wrote: »

happens all the time in the markets, its nothing new.

it would seem that the Bank that wants to borrow the 3mth money believes that the Libor is too high, and he is therefore only prepared to bid lower than Libor.

The Bank that is offering the money, realises this and is therefore quite happy to offer lower.

I would imagine the bidding Bank prob started with a bid around 1.45, and the offering Bank around 1.50, and they have eventually agreed to meet somewhere inbetween (at 1.48 in this case)

It is sign that 3mth Libor will most probably continue to ease.

Equally, if it is apparant that Libors, or the BOE rate are going to move higher, you may find InterBank Depos trading above Libor in certain periods.