Some LIBOR info for you...

inspector_monkfish

FYI,

since the last BOE base rate cut on 5th March, from 1.00pct to 0.50pct....

3mth LIBOR has fallen 133 basis pts
6mth LIBOR has fallen 131 basis pts
9mth LIBOR has fallen 124 basis pts
12mth LIBOR has fallen 114 basis pts

IveSeenTheLight

Indicating that there is unlikely to be a change in the BoE base rate.

inspector_monkfish

IveSeenTheLight wrote: »

Indicating that there is unlikely to be a change in the BoE base rate.

can't rule it out

IveSeenTheLight

inspector_monkfish wrote: »

can't rule it out

Didn't say it wouldn't, just unlikely.

inspector_monkfish

IveSeenTheLight wrote: »

Didn't say it wouldn't, just unlikely.

sure, just couldn't work out how you say that the recent LIBOR falls indicate 'no change' to boe base rate?

IveSeenTheLight

inspector_monkfish wrote: »

sure, just couldn't work out how you say that the recent LIBOR falls indicate 'no change' to boe base rate?

As the gap between Libor and the BoE returns to more normal levels, is it not an partially indicator of how they see BoE interest rates going forward?

With the 6 month LIBOR rate being 0.76%, do you think there is likely to be an increase in the BoE rate? If it does (and why I said unlikely) then the Libor drop from a week ago would be rebonding back again

http://www.bankrate.com/rates/interest-rates/libor.aspx

inspector_monkfish

IveSeenTheLight wrote: »

As the gap between Libor and the BoE returns to more normal levels, is it not an partially indicator of how they see BoE interest rates going forward?

With the 6 month LIBOR rate being 0.76%, do you think there is likely to be an increase in the BoE rate? If it does (and why I said unlikely) then the Libor drop from a week ago would be rebonding back again

http://www.bankrate.com/rates/interest-rates/libor.aspx

i know what you are saying, but its a bit difficult to read it like that.

when base rate was 1.00pct on 5th March, 6mth LIBOR was 2.18pct
6mths later and the base rate is 0.50% !

so who knows

michaels

Libor minus OIS spread should equate to the liquidity/default risk component?

Generali

michaels wrote: »

Libor minus OIS spread should equate to the liquidity/default risk component?

Plus cost of placing the cash (gotta pay the staff etc) plus a little something to make the trade worthwhile.

inspector_monkfish

IveSeenTheLight wrote: »

With the 6 month LIBOR rate being 0.76%, do you think there is likely to be an increase in the BoE rate? If it does (and why I said unlikely) then the Libor drop from a week ago would be rebonding back again

more likely to fall than rise in my opinion

purch

With the 6 month LIBOR rate being 0.76%, do you think there is likely to be an increase in the BoE rate?

Under normal circumstances a 6m LIBOR of 1/4 % above Base Rate, and a 3m LIBOR below Base Rate would point to a small cut.