CPI Card Group’s Post

Request of Clarification #Q1:- Is there any sufficient market information (Symmetrical Information) to change the exchange rate twice a day? #Q2:- Does the float rate that is observed in the market bank-deriven or market-deriven?

Weekly Rate Update and Forward Curve 04.15.24 Once again, bonds sold off heavily last week. Two-year swap rates closed the week higher b y 17 bps. Ten-year swaps were higher b y 12 bps. A s traders continue to price 2024 rate cuts out o f the market, the two-year swap is approaching 5.00%. W e last saw a 5.00% o n the two-year swap in October 2023. Last Wednesday, monthly core CPI readings came in at 0.4% vs. 0.3% survey. That is the third 0.4% reading in a row, bringing the YoY core rate to 3.80%, which is also above expectations. Treasury auctions were also poorly received last week. This week started with heavy selling in treasuries after a much hotter than expected Retail Sales print. https://lnkd.in/ekwWkRx

Money Markets Updates for this week. Last week short-term interest rates continued the decline. The yield on the 91-Day, 182-Day and 1-Year T-Bill rates fell by 29bps, 30bps and 40bps to close at 28.30%, 30.79% and 31.40% respectively. BOG bill rates fell by 99bps to 29.00%. Interbank interest rates fell by 30bps to 29.34%. The Treasury Bill auction on Friday witnessed unprecedented demand, surpassing the target by 58.26%. Responding to the demand, the Government accepted a total of GHS 4.527 billion, surpassing the auction target of GHS 2.861 billion by GHS 1.666 billion. 1. Why do you think Government Decided to Exceed their auction Target? And why are we seeing a high demand on T-Bills? Let’s get Interactive … Money Market Term(s) of the Week Floating Rate Payer: The floating-rate payer of a swap is the party that pays a floating interest rate.

A bond's coupon rate is the interest earned on the bond over its lifetime, while its yield to maturity reflects its changing value in the secondary market.

Weekly Rate Update and Forward Curve 04.22.24 The curve steepened last week, with ten-year swap rates increasing by ten bps while two-year swaps increased by seven bps. In early trading this morning, the curve has continued this steepening pattern. Last Monday, Retail Sales came in much stronger than expected (headline 0.7% act. vs. 0.4% surv.). Americans continue to spend, given a very strong jobs market. This week, starting on Tuesday, we will get record treasury auctions of twos ($69B), fives ($70B), and sevens ($44B). We will watch closely how well these auctions are absorbed.  The headline number for the week will be PCE on Friday. PCE Core is expected to remain constant at 0.3% vs. 0.3% prior and 2.7% YoY vs. 2.8% prior. https://lnkd.in/ekwWkRx

Interesting article about the S&P index performance and how overall market performance influences PE due to lending conditions. S&P Global (SPGI) Rises 22% in a Year: What You Should Know. https://lnkd.in/eGS9PnCy

What is Zero - Coupon Bond ? Zero coupon bond does not pay any coupons during their term of the bond. Bond is issued at a discount to the face value and redeemed at face value. The effective interest rate earned is the difference between face value and the discounted issue price. Zero bond- long maturity - issued at a very big discount to the face value. Also called deep discount bonds. What is Floating Rate Bond? Floating Rate Bonds are instruments - interest rate is not fixed re-set periodically with reference to apre- decided benchmark rate. Variable rate bonds and Adjustable rate bonds. Coupon rates are reset at longer time intervals of a year and above.

Unlike traditional fixed-rate bonds, whose prices typically decline as interest rates rise, floating rate bonds adjust their interest payments in line with changes in interest rates. https://buff.ly/3QSAxZB

The CBSL issued new T-Bonds on 15/06/2029 and 01/10/2032, with interest rates of 12.98% and 13.25%, respectively, raising LKR 60 billion to settle interest payments of LKR 57 billion from previous bonds. The yield curve has steepened considerably since 31st January 2024, with longer-term yields rising back to January levels while shorter-term yields remain lower. Source : Charts.lk

Analysis of the prevailing yield curve indicates that it is discounting between five & six 25bps interest rate cuts by the SARB MPC. Therefore, by entering into a fixed interest rate swap the corporate has an opportunity to lock in these cuts while getting certainty around interest costs.    The last time the market presented this opportunity was in December '23 and no cuts were forthcoming so the strategy made sense to those that took advantage.