The three-month U.S. dollar London interbank offered rate, or Libor, was fixed at 0.5363% Tuesday, up from 0.5097% on Monday. The rate is the highest since early July of last year and has been on the rise since the spring on growing worries over sovereign debt problems in the euro zone. The spread between Libor and overnight index swaps have also widened, a move that's viewed as a sign of banks growing more reluctant to lend to each other
This is a key to watch. The higher it gets, the worse it will become.
4 comments:
CB's Consumer number was at the highest level since early 2008 for what it's worth. How stinging it would be if something drags us down just when the consumer may have started peaking their head out.
The problem we have is the June 2010 which settles on June 14(i believe) has a .74..which indicates we have further to rise...the December 2010 is now 1.12. To put this in perspective
at the end of 2009 the June 2009
contract was .68 and the December was 1.44. The market was expecting a rise in rates for 2010 although
I think it was because of strong recovery. What we have now is the rise in rates due to credit lending fears coupled with more sluggish economic expectations.
I'm kind of worried about May's jobs report, given the sharp rise in jobless claims last week(the Labor Department said there were no special factors). That consumer confidence report is somewhat encouraging, even though I think it came before the Europe worries really started.
@Anon at 12:49
Yeah it could be big. I don't believe much in Gallup's economic numbers but their job creation index is still near the 52 week high and that is the latest number we can find right now. Claims are staying very stubborn but hopefully it will be like April where they didn't hurt the report much.
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