Follow on Google News News By Tag Industry News News By Location Country(s) Industry News
Follow on Google News | Ovetii (Greece) - U.S. Interest-Rate Swap Rate below Europe's for First time since 2004Ovetii have recently reported that derivative markets are showing that it's cheaper to exchange fixed- for floating- interest-rate payments over a two-year period in the U.S. than in Europe for the first time since April 2004.
By: Investline A senior Ovetii analyst reportedly stated that expectations for more Federal Reserve interest rate cuts combined with the European Central Bank's obstinacy in seeing the shadow of inflation lurking behind every tree in the background is narrowing the swaps spread, A move in the spread between U.S. and European two-year swap rates to minus 20 basis points is certainly feasible. Ovetii researchers are apparently of the opinion that a further narrowing of the spread will benefit holders of agreements to receive fixed-rate payments on U.S. swaps, and to pay fixed-rate payments on European swaps. An Ovetii source have stated that soaring trading volume in the swap market has increased its allure to investors. The average daily turnover in interest-rate swaps soared 95 percent in the last three years to $1.21 trillion a day, according to a Bank for International Settlements survey released last month. End
|
|