First signs that something is moving in the markets 20.03.2009

Author: David Whittaker Posted on: 20 March 2009

Having been heavily oversubscribed this week (7.35 x Cover) on Wednesday's auction the Bank of England has announced an additional £1Bn for next week totalling £6Bn.

Not only does this show confidence in the programme but there may just be some signs of movement on 3 month LIBOR rate that only moved 13 bps in the month following the February reduction of 0.5% yet we have already seen 26bp off and still mearly another two weeks to the next MPC meeting.

Given that most people do not now expect a further rate cut in early April, the downward trend at 3bp per day is very important. The last few days has also seen some easing in SWAP rates which may be as a result of the auctions.

Author: David Whittaker