Good afternoon everyone,
just the month of October , and we have the closing Euribor monthly average. If last September, the closing of the monthly average was 1.42% in the month of October, the average monthly closing of was 1.495%, while the daily exchange rate right now is already in the 1.54%. It seems clear that the upward trend of the Euribor has been launched.
With this, are now seven consecutive months of increases . We begin to perceive the tension in the interbank market. is increasingly difficult raise money to finance and that makes up the Euribor. The money is increasingly scarce. Financial institutions lend it to each other to higher interest rates, ie at a higher price of the Euribor. All financial institutions have large financing needs and funding cheap and abundant European Central Bank is over. It is the law of supply and demand: demand is lot of money to meet debt maturities by banks and on the other hand, the money needed to meet debt maturities, it is becoming more scarce . Something that is very demanding and increasingly low, can only become more expensive and therefore, the Euribor, which measures the cost rises. Pure common sense .......
seems that by the end of 2011, banks and English savings banks have maturities of more than 216,000 million . This forces them to get that money, one way or another.
I venture to make two forecasts :
a) One the Euribor will rise to levels much higher than today. Conveniene NOT forget that the current level of Euribor, are historically very low. Ie likely to start up and keep going up, many more than likely go down and down.
b) And, two, to capture that money that they need necessarily to banks and savings banks, among other possibilities, will have to offer deposits and interest-bearing accounts at an interest rate than today. are coming good returns for savers ...
The entry I did last September on the end of the month euribor September explained a number of factors to consider to understand the reason for the possible rise or fall in the Euribor. To not accept, I refer to your reading.
Regards,
José Antonio
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