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Uk 10 Year Bond Auction

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This mornings UK 10 year bond auction. Average interest rate up to 2.37% from 1.73% in April.

http://www.forexfactory.com/index.php#detail=47662

Significant. Are interest rates on the rise?

2.15% in the February auction.

I was hoping we'd see a turn in mortgage rates, at least, but no:

http://themortgagemeter.com/#/graphs

Fully expecting Carney to QE more anyway.

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I was hoping we'd see a turn in mortgage rates, at least, but no:

http://themortgagemeter.com/#/graphs

Fully expecting Carney to QE more anyway.

I concur. The lenders have either been given an inside steer from the Treasury or they're trying to front run the next QE announcement by holding pat.

Nice to see the coupon up anyway.

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Free Trader highlighted an auction recently which demonstrated that (in all likelihood) the BoE was no longer active in the market, signalling that the current QE ceiling had been achieved. Seems like it's a practical certainty that he'll sanction more, everything possible has been done to make the decision an easy one for him.

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Cable seems to be continuing its downward trajectory this morning. Can see it hitting the May lows before too long.

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I dont understand all the issues re this effect on mortgage rates. For example :

i) Overall haven't fees gone up a lot, and therefore it is now difficult to judge on rates alone, so maybe some of the rate rise is pushed into fees ?

ii) Don't through funding for lending the banks pay less for lending if they only lend a certain volume, thus it may make it more lucrative to them to keep rates low in order to make sure they get the volume and benefit from the lower funding for lending rates, even though some of the money may actually cost them more ?

Such is the effect of government intervention. Personally I think all this obscurification into fees/rates is outrageous. The government wants people to make informed decisions (?) surely it should simplfy the decision making process and make it compulsary for people to be able to easily compare different products.

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I dont understand all the issues re this effect on mortgage rates. For example :

i) Overall haven't fees gone up a lot, and therefore it is now difficult to judge on rates alone, so maybe some of the rate rise is pushed into fees ?

ii) Don't through funding for lending the banks pay less for lending if they only lend a certain volume, thus it may make it more lucrative to them to keep rates low in order to make sure they get the volume and benefit from the lower funding for lending rates, even though some of the money may actually cost them more ?

Such is the effect of government intervention. Personally I think all this obscurification into fees/rates is outrageous. The government wants people to make informed decisions (?) surely it should simplfy the decision making process and make it compulsary for people to be able to easily compare different products.

You see that government intervention is the problem, then call for more intervention? :huh:

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You see that government intervention is the problem, then call for more intervention? :huh:

Yes. Government intervention when they are trying to stop me buying a house is bad.

Government intervention when someone is attempting to stab me in the street or when I'm having a heart attack is good.

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I dont understand all the issues re this effect on mortgage rates. For example :

i) Overall haven't fees gone up a lot, and therefore it is now difficult to judge on rates alone, so maybe some of the rate rise is pushed into fees ?

ii) Don't through funding for lending the banks pay less for lending if they only lend a certain volume, thus it may make it more lucrative to them to keep rates low in order to make sure they get the volume and benefit from the lower funding for lending rates, even though some of the money may actually cost them more ?

Such is the effect of government intervention. Personally I think all this obscurification into fees/rates is outrageous. The government wants people to make informed decisions (?) surely it should simplfy the decision making process and make it compulsary for people to be able to easily compare different products.

Fee rises indicate a preference for larger mortgages with bigger deposits, ie a flight from default risk.

My theory has always been that the BoE are perfectly fine with rich folk improving banks' balance sheets by piling into desirable property. They won't riot when they lose it.

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Yes. Government intervention when they are trying to stop me buying a house is bad.

Government intervention when someone is attempting to stab me in the street or when I'm having a heart attack is good.

Thank goodness Government can always work out what is good and what is bad and only do the 'good' intervention... :rolleyes:

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Thank goodness Government can always work out what is good and what is bad and only do the 'good' intervention... :rolleyes:

Well clearly to me it can't.

But as I understand it that wasn't your original point, which appeared to be that it is somehow logically inconsistent to argue that government regulation can be bad or poorly implemented in some areas but good in others.

To me it only seems inconsistent to argue this if you believe all regulation is bad, or all is good.

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For those of you scratching your heads and thinking:

"Hang on a minute, Bloomberg and Reuters-Thomson are showing 2.39% for the UK 10-year yield at the moment, whereas today's auction result was 2.58%?"

...see this post in the Gilts Thread for an explanation. The benchmark gilt being quoted by financial news services isn't a true 10-year bond. The actual interpolated 10-year yield is currently significantly higher than headline market quotes.

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So we could borrow £100bn at a negative real cost for 10 yrs and build 1 million homes.

Brain dead simple unless you're an austerian Gidiot who is cutting invesment and still borrowing more.

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This mornings UK 10 year bond auction. Average interest rate up to 2.37% from 1.73% in April.

http://www.forexfactory.com/index.php#detail=47662

Significant. Are interest rates on the rise?

2.15% in the February auction.

Denninger seems to think so, and i guess they havent stopped QE in the states, so perhaps even if we did re-start QE, it wouldnt make any difference.

Theres always the 'buying 20 years' scenario like Japan. But then we neither are net exporters or have a vast amount of domestic savers on whom to shove bonds at, so im not sure how likely that is in our case. Nothing much to support the value of sterling IMO.

OTOH, inflation looked a lot higher 18 months ago or so, when petrol shot up from 120ppl to 140ppl and everything else seemed to be rising. Hasnt fallen back much, but the chance of inflation taking off seemed a lot higher then than now.

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Free Trader highlighted an auction recently which demonstrated that (in all likelihood) the BoE was no longer active in the market, signalling that the current QE ceiling had been achieved. Seems like it's a practical certainty that he'll sanction more, everything possible has been done to make the decision an easy one for him.

We're all the other cental banks loading up on UK bonds to try and weaken their own currencies for a while. I recall reading the Swiss national bank was buying a large part of UK debt.

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Denninger seems to think so, and i guess they havent stopped QE in the states, so perhaps even if we did re-start QE, it wouldnt make any difference.

Theres always the 'buying 20 years' scenario like Japan. But then we neither are net exporters or have a vast amount of domestic savers on whom to shove bonds at, so im not sure how likely that is in our case. Nothing much to support the value of sterling IMO.

OTOH, inflation looked a lot higher 18 months ago or so, when petrol shot up from 120ppl to 140ppl and everything else seemed to be rising. Hasnt fallen back much, but the chance of inflation taking off seemed a lot higher then than now.

Trouble is superimposed on the monetary policy effect on fuel prices there is speculation, price increases due to wars etc, dramatic changes in production in say the US plus the general global demand (downturn in manufacturing/shipping?).

Then in food you've got similar like the bad weather affecting last years harvest.

To me with all these additional variables it is hard to see the long term price trend.

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We're all the other cental banks loading up on UK bonds to try and weaken their own currencies for a while. I recall reading the Swiss national bank was buying a large part of UK debt.

It's a circle jerk. Central banks buy each other's debt for 'non-commercial' purposes. Mostly US treasuries though. Thus, the US will be the last Ponzi game standing.

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It's a circle jerk. Central banks buy each other's debt for 'non-commercial' purposes. Mostly US treasuries though. Thus, the US will be the last Ponzi game standing.

Unless theyre really desperate, like the Spanish one. I recall a ZH post a few months back detailing how over 50% of their debt derived assets were diversified by foreign investments, now its over 90% domestic. I guess at least they have confidence in their debt :lol:

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  • 246 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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