Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, June 09, 2007
What’s the Deal with US Bond Yields? / Interest-Rates / US Bonds
By: Paul_L_Kasriel
Why have bond yields moved so violently upward this past week? Well, yes, some of the data last week were stronger than expected. But come on, May nonfarm payrolls increasing 157,000, getting a boost from 203,000 assumed (birth/death adjustment) workers being added to unadjusted payrolls, and coming on the heels of an 80,000 increase in April is hardly the stuff of the bond market massacre we have witnessed this week.Read full article... Read full article...
Saturday, June 09, 2007
US Interest Rate Spike and What to Do About It / Interest-Rates / US Interest Rates
By: Roger_Conrad
The 10-year Treasury note yield is again more than 5 percent. And while the benchmark is off its high for the day—it reached 5.24 percent at one point—the fallout has at last reached the rest of the income investment universe.
The Dow Jones Utility Average is now down about 9.1 percent from the all-time high of about 537 that it set in late May. The typical US real estate investment trust (REIT) is down 13.5 percent, and many bond funds are showing similar carnage, particularly those with the highest duration—i.e., leverage to interest rates.
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Friday, June 08, 2007
Bonds In The Tank? / Interest-Rates / US Bonds
By: Andy_Sutton
On first glance, it might appear that this is a baseball column. Certainly, Barry Bonds has had a tough time getting decent pitches to hit out the park recently. Such has also been the case with the bond market. As of the time of this writing, the yield on the 10-year has touched 5.25% indicating a shift shift in thought. There are two sides to every story, and like most other situations the ramifications are far-reaching.Read full article... Read full article...
Friday, June 08, 2007
What Will the Fed Make of the US Bond Market Panic? / Interest-Rates / US Bonds
By: Adrian_Ash
"...If US consumers and Washington can't borrow cheap at the long end this summer, then they'll just have to get cheap money at the short end instead..."
"POSSIBLY THE EASIEST act for any human being is to spend money which does not belong to him," wrote Robert L. Smitley in his 1933 classic, Popular Financial Delusions .
The only thing easier, in fact, is lending money that's not yours and earning a yield on the profit or loss either way. "Almost anyone will risk funds in an enterprise when the funds are not his own," Smitley went on during the Western world's last Great Depression. Hence today's bubble in all assets.
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Friday, June 08, 2007
US Interest Rates Conundrum Unwind or Glut Rewind? / Interest-Rates / US Interest Rates
By: Brady_Willett
The U.S. economy slowed to a crawl in 1Q07 and the U.S. housing market is, by many accounts, years away from a meaningful rebound. With this in mind, why are long-term U.S. interest rates spiking higher and why have mortgage rates risen in each of the last four weeks to rest at 10-month highs?Read full article... Read full article...
Friday, June 08, 2007
Bond Market Massacre! / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson, here. Two weeks ago, I issued an urgent bond market warning. I said that Treasury bond prices were falling and threatening a critical level of support. If we broke through it, I said, prices could really plunge and rates could take off like a rocket.
Well, guess what? We just sliced through that support like a hot knife through butter. Long bonds plunged by more than a point yesterday. While that may not sound like much, it was the biggest one-day percentage drop in more than 26 months!
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Thursday, June 07, 2007
Bank of England Leaves Interest Rates on Hold at 5.50pcent / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
As widely expected the Bank of England left UK interest rates on hold at 5.50%. The previous change in Bank Rate was an increase of 0.25 percentage points to 5.5% on 10 May 2007. The Market Oracle is forecasting the next rate rise to occur in August 2007 UK Interest Rates - The next rise to 5.75% to occur in...
The decision to keep rates on hold gives the bank time to evaluate new inflation data for May and June, before taking the next anticipated decision to raise rates in August or earlier if the CPI again jumps above 3%
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Wednesday, June 06, 2007
The ECB Takes Another Step Toward Reining In Global Liquidity / Interest-Rates / ECB Interest Rates
By: Paul_L_Kasriel
Today the European Central Bank (ECB) raised its policy interest rate 25 basis points to a level of 4.0%. Today's rate hike brings the cumulative increase to an even 200 basis points since the ECB started hiking its policy rate in December 2005. Comments by ECB President Trichet suggest that the ECB is not yet finished raising its policy interest rate.Read full article... Read full article...
Wednesday, June 06, 2007
ECB Raises European Interest Rates to 4% / Interest-Rates / ECB Interest Rates
By: Nadeem_Walayat
As widely expected the European Central Bank today raised its key benchmark rate by 0.25% to 4% on the back of a strengthening Euro zone economy. This marks the eighth rise since December 2005.Read full article... Read full article...
Tuesday, June 05, 2007
US T-Bond Yield Hits Resistance, A potential problem for the Fed? / Interest-Rates / US Interest Rates
By: Marty_Chenard
In case nobody is watching, the 30 Year Bond Yield is about to test its 8 year resistance for the second time. This is something to keep a close eye on, because 30 year yields and mortgage rates go hand in hand. See the long term chart below.
The concern is that home building is in a slump and many are speculating that we might be at a bottom ... ready to turn around. If the 30 year yield jumps up, then that would effect how large a home someone could afford, and it would mean that home sellers would get less for their homes in the longer term ... and fewer homes would sell.
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Tuesday, June 05, 2007
UK Interest Rates - The next rise to 5.75% to occur in... / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Banks minutes and inflation report, and recent comments by the bank governer Mervyn King, all point towards to a further rise to 5.75%. The question is will interest rates rise this week ?Read full article... Read full article...
Friday, May 25, 2007
Tremors in the US Bond Market / Interest-Rates / US Bonds
By: Money_and_Markets
I've had plenty to talk about in recent weeks — underperforming REITs … the ongoing problems in housing … risky commercial real estate financing … private equity firms gone wild … overseas profit opportunities. These are truly interesting times in many markets.
But there's been one thing I haven't talked about — interest rates. The reason? They haven't been going anywhere. You ever see one of those EKG machine readouts? That's what the chart of 10-year Treasury Note yields has looked like since last August.
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Sunday, May 20, 2007
Eau de Liquidity and the consequences of the spectacular boom in securitized lending / Interest-Rates / Liquidity Bubble
By: Michael_J_Panzner
Recent news reports highlight the difficulties some troubled borrowers are facing when trying to renegotiate payment and other terms with lenders. In many instances, the problems stem from the fact that the loans have been sliced, diced, and repackaged into mortgage-backed securities, which have then been sold to investors in the U.S. and around the world.Read full article... Read full article...
Saturday, May 19, 2007
People's Bank of China Takes With One Hand, Gives With The Other? / Interest-Rates / China Economy
By: Paul_L_Kasriel
The People's Bank of China (PBOC) announced today that it was raising the required reserve ratio on its constituent banks by 0.5 percentage points to 11.5%. This would be the eighth increase in the required reserve ratio since June 2006 when the ratio was 7.5%. You would think that with the PBOC mandating that banks now hold more reserves, the cost of reserve credit would be moving up. Think again. Chart 1 shows that the Chinese overnight interbank interest rate, the equivalent of the U.S. fed funds rate, stood at 1.57% in March (latest data that I have available) - 12 basis points lower than where it was in June 2006, before the required reserve ratio started its ascent.Read full article... Read full article...
Thursday, May 17, 2007
Inflation report confirms further rise in UK Interest rates to 5.75% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
With the publication of the quarterly inflation report, Bank of England Governor Mervyn King confirmed that a further rise in interest rates to 5.75% is likely to occur later this summer, in an attempt to bring inflation back under control. He stated "The path of interest rates assumed in this projection anticipates a further rise in the bank rate,"
The inflation report confirmed that a rise in interest rates to 5.75% is required to meet the CPI target of 2% in two years time .
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Friday, May 11, 2007
FOMC - The Prospects for the US Interest Rates and the Dollar / Interest-Rates / US Interest Rates
By: Julian_DW_Phillips
The Fed's Open Market Committee yesterday repeated its assessment from March 21st that persistent inflation remains the predominant policy concern. Interest rates were held at 5.25%. The Fed has just said, "inflation is a predominant risk" but did not raise interest rates, and indicated that it is not likely to do so, as it pointed to lower growth and the ongoing housing price problems.
The impression given is that it will react to higher inflation but will not pre-empt it. The dangers of inflation with falling growth [stagflation] are now apparent. This is gold positive and $ negative as the Trade deficit will continue at excessive levels in a climate that could discourage the investment of surplus $ [Asian nations in particular] back into the States.
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Thursday, May 10, 2007
ECB Will Hike Interest Rates In June But Second-Half Policy Outlook Is Still Unclear / Interest-Rates / Euro-Zone
By: Victoria_Marklew
As expected, the European Central Bank (ECB) kept its Refi rate unchanged at 3.75% this morning, but signaled that it expects a rate hike at the June 6 meeting. Trichet stated that "strong vigilance is of the essence in order to ensure that risks to price stability over the medium term do not materialize."Read full article... Read full article...
Thursday, May 10, 2007
Credit Collapse - May 10th / Interest-Rates / Credit Crunch
By: Paul_Lamont
On May 10 th 1837 , the banks of New York suspended gold and silver payments for their notes. Fear ignited bank runs throughout the United States . The young country fell into a 7 year depression. How could two decades of prosperity end so suddenly? According to America : A Narrative History : “monetary inflation had fueled an era of speculation in real estate, canals, and railroad stocks.” Cracks in the dam were visible much earlier, as the stock market peaked in inflation-adjusted value three years prior. According to Rolf Nef, debt levels in the private sector rose to 150% of GDP. In late 1836, the Bank of England concerned with inflation raised interest rates. As rates rose in England , credit tightened, and U.S. asset prices began to fall.Read full article... Read full article...
Thursday, May 10, 2007
Bank of England Raises UK Interest Rates by 0.25% to 5.5% / Interest-Rates / UK Interest Rates
By: Sarah_Jones
As widely expected UK interest rates have been raised to 5.5% at mid-day today.
In a statement the Bank of England stated :
The Bank of England's Monetary Policy Committee today voted to raise the official Bank Rate paid on commercial bank reserves by 0.25 percentage points to 5.5%.
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Wednesday, May 09, 2007
UK Interest Rates Expected to Rise to 5.50% Tomorrow / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The rise in UK interest rates to the interim target of 5.50% is expected to occur at mid-day tomorrow. The rises in interest rates towards the Market Oracle target of 5.75% by Sept 2007 are a consequence of the Bank of England failing to control inflation.Read full article... Read full article...