October 2006
You're watching the articles of Euribor for the month of October 2006.
The Euribor for the first time yesterday surpassed the psychological barrier of 3.8% compared to the comments of several members of the European Central Bank on the need to continue raising interest rates in the eurozone in the case that economic growth will continue firm.
Experts expect it to touch 4% by the end of the year.
This is the first time that this index touches this level in the last four and a half years, since in June 2002 was around this elevation to close the month at the 3.86%. Besides representing a significant increase compared to last September, when it ended the month in 3715%. At this time, the average Euribor what we in the month stands at 3761%.
In this way, the Euribor facing the thirteenth consecutive monthly rise. In September, unlike in previous months, mortgage rates began in recent days to moderate, due to contagion from existing fears in the U.S. that the Fed begins to lower interest rates before a possible recession. The omens on U.S. monetary policy and moderation in the index that led analysts to augur a softening of the rebound in the final months of the year. However, these hopes may be broken again in the light of the new branch of this index in recent days.
On Thursday October 5, the European Central Bank (ECB) raised interest rates to 3.25% and opened the door to further increases in coming months to put a brake on inflation. Since then, its members have not stopped to give clues about future hikes.
The latest occurred yesterday on the occasion of the publication of the monthly report of this institution. Specifically, he reiterated that it expects tighten monetary policy if it meets the expected growth in the euro zone. "If the scenario envisaged by the governing council is confirmed, will ensure an elimination of accommodative monetary," the ECB wrote in its October bulletin.
This statement coincides with the discourse of Jean-Claude Trichet at the press conference last week. Since a few months ago, the ECB is talking about a "progressive" withdrawal of money supply, but Trichet did not use the word "progressive" in his last appearance in the Oct. 5. This has been interpreted as a sign that the ECB will only think about climbing once again interest rates after the last increase on Oct. 5 from 3% to 3.5%. However, some analysts believe the Euribor can play the 4% before the end of the year.
Written by Carlos Lopez on Oct. 13, 2006 with 2 comments
Read more articles on Euribor.
After the excellent data from the CPI last month, everything seemed to indicate that the ECB could halt the rise in rates, but unfortunately that price declines are not due to structural reforms if not for something as volatile and unpredictable as the price of oil.
Since a few months ago, the ECB is talking about a "progressive" withdrawal of money supply, but Trichet did not use the word "progressive" in his last appearance in the Oct. 5. This has been interpreted as a sign that the ECB will only think about climbing once again interest rates after the last increase on Oct. 5 from 3% to 3.5%.
Similarly, the European Central Bank (ECB) said today in its monthly bulletin, that the rate of inflation in the euro zone remain high, above 2% due to energy prices.
The ECB calculated that despite the fall in the Consumer Price Index (CPI) in September in the euro zone to 1.8%, inflation will exceed 2% in 2006 and "probably will remain at these levels 2007 ".
Thus, it would be naive for now, that interest rates will go down in the short term and with it our mortgages ...
Written by Carlos Lopez on Oct. 12, 2006 with 5 comments
Read more articles on Euribor.
So, predictably we will see further increases in rates, Euribor and mortgages.
In his customary press conference after the meeting of the ECB, the president of the European Central Bank (ECB), Jean Claude Trichet said today that interest rates "remain low" despite the rise in quarter-point today agreed, up 3.25%, and stated that "the ECB will do what is necessary to achieve price stability."
In his view, the ECB's monetary policy remains "accommodative", but stressed that whether the "expectations" of the European monetary authority, would be a "gradual withdrawal" of this strategy
The last time that the ECB rate stood at 3.25% was between late 2001 and late 2002. At that time, the institution had lowered rates from the high of 4.75% reached in late 2000 and was pursuing a policy accommodative ending in the summer of 2003, with the floor of 2%.
The rise in rates affects the Euribor, the reference rate for most mortgages that are granted in Spain. This indicator grew in September to 3715%, the highest level in four years
Written by Carlos Lopez on Oct. 5, 2006 with 12 comments
Read more articles on Euribor.
As was already discounted. The European Central Bank (ECB) has raised the price of money in the eurozone 0.25 points to 3.25% from 3% previously. The agency has raised money rates for the fifth time since December last year. The agency's president, Jean-Claude Trichet, also anticipates further price rises of money.
The European Central Bank (ECB) has raised interest rates to 3.25% and has made known that it will not be the last time you lift. "Rates are highest guaranteed if it is confirmed the main stage," said. Moreover, has again noted that inflationary risks remain and provides, in fact, the increase in the CPI to rise above 2% per year (the goal of the Central Bank) in 2006 and 2007.
The ECB also raised the deposit facility, which marks the payment of money, up 2.25%, as did the marginal lending facility, for which lends money to European banks, to 4.25%.
Today's decision encarecerá mortgages, but experts do not see a serious situation in this circumstance, since by the time the sluggishness of the families is low and the current level is not excessively high.
In addition, the Euribor has already discounted the increase today. This guy, who serves as a reference in most mortgages that are granted in Spain, grew in September to 3715%, the highest level in four years.
The analysts believe that interest rates are still low and remember that it is likely that the price increases this year are stopped in 2007. In addition, discarded a sharp slowdown in the property sector, despite recent data about the slowdown in the rise in the price of housing.
Written by Carlos Lopez on Oct. 5, 2006 0 comments
Read more articles on Euribor.
The European Central Bank (ECB) will raise interest rates tomorrow to 3.25% and apply a new quarter-point increase before the end of the year, after what is likely to keep unchanged the price of money, according to analysts consulted by Europa Press.
Apart from the publication of the latest macroeconomic data, the latest appearances of the institution's president, Jean Claude Trichet, went on this line and included the phrase "strong vigilance" with which the governor tends to prepare the market for a rise rate. On the other hand, recent data disseminated by Eurostat, which shows a containment of inflation and the consolidation of growth, demonstrate the appropriateness of the previous hikes and the current ECB monetary policy, launched in December 2005 and marked for a less accommodative trend. A major concern of the ECB, inflation was contained in September. Prices rose in the eurozone by 1.8% year, five-tenths less than in the previous month, in an environment of cheaper crude. This improvement does not occur at the expense of growth since the GDP of the region monetary rose by 2.6% in the second quarter, five points on the previous one. The rest of macroeconomic data showed conflicting results. Unemployment rose a tenth in August and reached 7.9%, while the M3 money supply, which measures the money available quickly for the purchase of goods and serving the ECB to measure inflation, grew by 8.2 in August % Annually, more than four tenths in July, despite a decrease in quarterly terms.
EFFECT ON HOUSING.
The Euribor, the kind that are granted most of the mortgages in Spain, grew in August to 3715%, the highest level in four years, and any rise in interest rates could accelerate in principle the cost of mortgages and debt of the families.
However, analysts rule out that this situation poses a risk to the housing market. The analyst's Banco Sabadell Sofia Rodriguez Rico explains that the price increases "lead, no doubt, to a situation where financial conditions are less loose," but believes that "the real interest rate in Spain still remains at very low levels" and that "the deteriorating financial situation of families in debt should not prevent this sector, in aggregate terms, is capable of dealing with the debt service."
In the same vein are expressed analysts Caja Madrid and Santander, who agreed that the mortgage market is safe and that ruled out imminent risks. According commented, despite recent increases, interest rates are still at low levels and it is expected that in 2007 no longer climb. These analysts note that the default rates are at historically low levels and rule out a sharp slowdown in the property sector, despite recent data about the slowdown in the rise in the price of housing.
FORECAST FOR 2007.
Most analysts expected the ECB to discontinue its policy of raising rates in 2007, but they are not unanimous in its finding. The analyst at Caja Madrid Juan Antonio Cabrera believes that Trichet did not apply beyond increases of 3.5% as from December, the ECB will have no room to undertake a further rise, as it "has already passed the most dynamic economic cycle. " If economic growth is moderating "this will affect the EU," he says, it ensures that the ECB will relax its monetary policy.
For the department of Santander's financial studies, it is difficult to venture decisions that will take the team Trichet in 2007. In his view, the economic picture is more complicated in 2007 by the slowdown of the U.S. economy and because the EU growth will be lower as a result of "increases in tax rates and contractionary." Therefore, estimates that there could be increases, but never above 4%. Moreover, a report by American Express indicates that the proper time for the European economy will continue to come until the year 2007, allowing the ECB to proceed with further increases in rates. "There is a risk of further rises in 2007" says the report. Analysts from Royal Bank of Scotland does not offer a forecast for 2007, but note that "with inflation below 2% in September and October and a forecast for next year that appears to significantly lower than in the stands, the ECB's mission (of raising rates) should end before or after. "
The experts agree that if it consolidates the cheaper oil, which today reached the lowest level in seven months to 57 U.S. dollars per changed, there will be a beneficial effect on the economy, especially in the U.S., which could offset in part a slowdown in its economy. Finally, Rico Rodriguez said that "if the official rates stood at just 3.5%, the largest part of the process of normalization of monetary policy will be completed."
Written by Carlos Lopez on Oct. 4, 2006 with 5 comments
Read more articles on Euribor.
