Santa Has Come Early

Last Week: Interest Rates resumed their upward march after digesting the Fed’s decision to raise the key federal funds target rate by 25 basis points to a range of 0.50% to 0.75%. While the move was expected, markets needed a breather to factor in the FOMC’s statement that it would target three rate hikes in […]

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Featured Currency Pair: USD-GBP

After dominating the financial headlines for most of Q2, the UK’s “leave” referendum on EU membership caused the GBP to plummet, while EUR/USD also took a decent step lower. The vote also gave an unwelcome safe-haven boost to both the JPY and the CHF and even caused some to postulate the next Federal Reserve move […]

Boring and Beautiful

Last Week: Global equities and interest rates recorded solid increases last week, as major US indices set fresh records and European stocks posted their best week since February. Oil prices slid slightly, Gold weakened while the US Dollar strengthened to highs not seen since 2003. The yield on the 10-year US Treasury note increased 8 […]

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Interest Rate Caps: Acceptable Counterparties and the New Reality

Interest Rate Caps An interest rate cap is a derivative product for borrowers to manage floating rate risk (typically 1M LIBOR).  Sometimes a lender will require the borrower to purchase a “Swap” for interest rate protection.  The technical definition of a “Swap” includes interest rate caps and other types of derivatives. Most of our readers […]

Love Thy Fellow Consumer

Last Week: Interest rates and oil prices both rose while global equities consolidated as two major pieces of US economic data, jobs and GDP, solidified belief in an improving economy and inspired hopes of more to come. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX) edged up to 14 from 12.6, […]