How fast will we return to ‘normal’ interest rate levels over the next couple of years? What type of monetary policy will be pursued by the major central banks and when will interest rates start rising? We will closely monitor events in our two-weekly reports and offer you the most likely scenarios for interest rates in the US and Eurozone.
The interest rate markets still offer excellent opportunities to hedge your organisation against rising interest rates in the future. Please contact us if you are considering hedging your risks. Our consultants make the bank’s pricing transparent and assist you in concluding interest rate derivatives. This ensures you will not overpay interest.
The ECB has few levers to pull left to stimulate growth in case the trade war will result in lower business and consumer confidence and an economic recession. This could lead to a further decline in long-term rates, although we think a near-term upward correction of the 10-year German interest rate is likely. In the long-term, more fiscal easing is necessary to start a more structural uptrend in European long-term rates.
A growing number of investors believe the trade war will cause a US recession and this means increasing pressure on the Fed to do more to stimulate the economy. However, the US economy is less exposed to foreign trade and enjoys a robust inflow of capital. Hence, more Fed easing might actually boost growth more than expected and will result in higher rates and a steeper yield curve in the coming quarters.
A convenient overview (Excel sheet) of the FX rates, swap rates, Money Market deposits, Futures, Euribor and Libor fixings, Stock market indices, etc. A snapshot of the markets before 9:30 hrs. CEST.