09.02.2006

All of the above data and graphs are accurate to the best of our knowledge.

Use it at your own risk - we bear no responsibility of any kind.

Policy Comments

Events which may facilitate the increase/decrease of the interest rates in the future:
1. Economy slowdown or growth increase (both in US as well as in China)
2. Energy Prices Trends (higher oil prices will tend to slowdown US economy and will increase the threat of inflation)
3. Housing Price Trends (higher housing prices will make the FED to act more decisively on rate increases)
4. Major Catastrophic or Terrorist Event (in case of such an event, the FED is likely to ease and to reduce the interest rates)
5. Stock Market Crash (in case of a stock market crash, the FED will me giving money away to anyone who will want it, and will likely to lower rates
6. US Budget Deficits (higher deficits will bring up the interest rates, since the Government will be competing with the households for money)
7. Chinese as well as other Asian Countries policy of investing of US Dollars in US Treasuries (This can be big and can spell potential trouble - Once Chinese stop taking US IOUs, the rates are bound to go up)
8. US Dollar Price Trend (Higher US dollar means more money flowing into the US- meaning lower interest rates) 

Recommended Links:

Projected Euro-zone (Euro Denominated) Interest Rates

Projected United Kingdom/Great Britain (British Pound Denominated) Interest Rates

Projected Switzerland (Swiss Franc Denominated) Interest Rates

Projected Canadian (Canadian Dollar Denominated) Interest Rates

Projected Australian (Australian Dollar Denominated) Interest Rates

Projected New Zealand (New Zealand Dollar Denominated) Interest Rates

Projected Japanese (Japanese Yen Denominated) Interest Rates

Projected Future Interest Rate Differentials:

US Dollar - Euro

US Dollar - Pound

US Dollar - Japanese Yen

US Dollar - Swiss Franc

US Dollar - Canadian Dollar

US Dollar - Australian Dollar

US Dollar - New Zealand Dollar

New ::: Currency Correlations

Commitment of Traders Report Links:

Commitment of Traders Report: Federal Fund Futures

Commitment of Traders Report: Eurodollar Futures

Commitment of Traders Report: Interest Rate Futures

Commitment of Traders Report: US Dollar Index

Commitment of Traders Report: Currency Futures

Additional Info

Federal Funds Rate

This is the rate that banks charge each other on overnight loans made among them. These loans are generally made so that bank can cover their daily cash flow and reserve requirements. As the rate rises, banks have an increased incentive to keep more of their own cash on hand - making less money available to lend out to households and businesses.

The Federal Reserve Open Market Committee sets this rate based on the economic conditions in the country and the threat of inflation.

The future Federal Fund Rate gives an idea about what the market participants expect the Fed to do regarding the interest rates.

 

Eurodollar Rate

Eurodollars are the U.S. dollars on deposit in commercial banks outside of the United States. The Eurodollar market has grown tremendously over the past 3 decades as the dollar has become a world currency. Eurodollar deposits play a major role in the international capital markets. The Interbank market for immediate (spot) and forward delivery of offshore dollars is deep and liquid, giving banks the ability to fund dollar loans to foreign importers without incurring currency exchange risks. Eurodollar deposits are direct obligations of the commercial banks accepting the deposits.

Eurodollar rate reflects the London Interbank Offered Rate (LIBOR) for a three-month, $1 million offshore deposit.

Libor Futures

One-month LIBOR (London Interbank Offered Rate) rate is a reference for dealing in Eurodollar time deposits between commercial banks in the London Interbank Market. LIBOR often is the benchmark rate for commercial loans, mortgages, and floating rate debt issues. LIBOR rate is similar to the Eurodollar rate, but represents one-month LIBOR on a $3 million deposit.