Selected Interest Rates: A Summary

The key to all financial market prices to include exchange rates are interest rates. Interest rates today are dictated by respective national rates as many nations not only left libor but Libor is slated for elimination by end 2019. Every nation is now responsible for the price of their own financial instruments set by interest rates. USD interest rates by trading in its own markets for example prices USD exchange rates, stock indices, USD Gold and Silver and commodities priced in USD.

Every nation views and trades its own interest rates in a unique manner and this is why to report an overnight interest rate alone such as Europe’s Eonia is not enough to understand if interest rates overall are to high, to low, range or will trade to an intended target. A complement of national interest rates must be known in order to trade a respective nation’s financial instruments. Its a large body of knowledge yet interest rate trade to financial instruments is what the 1972 free float currency was intended.

Certain nations allow interest rate markets to move and Canada is the last holdout in relation to its counterpart nations while CHF interest rates trade in small channels.

BRL, SEK, NOK, MXN, ZAR and PLN normally trade in wide channels due to the wide channel prices of respective interest rates. Wide channel means the central banks force financial instruments to move. For INR, JPY, MYR, AUD, NZD trade in smaller channels while GBP is fast approaching interest rate trade in small channels. GBP matched CAD as the best open trade of interest rates but under Sonia changes, GBP, Brexit aside, is losing its status as consideration to open markets.

Viewed from the complement of interest rates per nation is actually the true yield curve as interest rates prices government securities. Interest rates also price FX Forward exchange rates.

An interest rate as it applies to financial instruments represents a support or resistance point and range trades as it applies to trade between interest rates. Trading interest rates to exchange rates and other financial instruments is the true manner to trade as all relevant information from support, resistance, target and range is known.

The key is to trade the correct financial instruments at the correct central banks interest rate release time otherwise traders will trade a non existent price. Certain central banks are wide open to view interest rates while other central banks are adept to hide interest rates. Certain central banks BOE and Sonia for example now force payment to receive interest rates. Smart traders understand how to price GBP in USD or another interest rate to maintain true GBP prices.

Every market price on the planet is highly influenced and complemented by USD interest rates. But its the world order to release times that allows USD to become pre eminent. After USD afternoon release times, NZD, AUD, JPY, CHF, GBP then EUR and CAD dominant the 24 hour market cycle. Afer NZD and AUD, all Asia nations then price interest rates from either NZD and AUD or straight from USD. What governs nations to either price in USD or NZD is times of trade in open markets and more importantly today is balance of trade between nations.

Historically, 3 month interest rate T Bills was predominant trade to finance governments in Hoover’s 1928 market crash then interest rates as known today began trade in the 1960’s.

Below is a partial list of the most vital interest rates in each nation and today’s rates. Most vital to the list as Libor eliminated is interest rates suffer severely from compression nation to nation. This means overall interest rate numbers per nation contain small distances and this compression solidifies low volatility price movements.

AUD. OCR 1.50 3 month 1.82. 3 month OIS 1.45.

NZD. OCR 1.75 3 month 1.88.

EUR. -0.368, 3 Month -0.314 or 0.632 and 0.686.

USD. Overnight 2.40, 3 Month Non Financial Commercial Paper 2.51. 3 Month Financial Commercial paper 2.60. 3 Month T Bills 2.41 and 3 Month Constant Maturity 2.46.

CAD. Corra 1.7375, Money Market Finance Rate 1.7484.

CHF. Saron -0.743. Call Money Rate, Tom Next -0.970. Debt Register Claims -0.781. 3 Month Libor -0.716.

Sweden. Repo Rates. Headline -0.25, 3 Month Stibor -0.024. Reference rate -0.50. Or 0.75, 0.976 and 0.50.

GBP. Overnight Sonia 0.705. 3 Month most vital Sonia and Repo rates by subscription.

Norway. Key Policy rate 0.75. Nowa Overnight Rate 0.74. 3 month T Bills 1.07.

JPY. Overnight Call Rates -0.059. Max traded 0.001, Minimum -0.086.

Brazil. Selic rate 6.50. DI rates 1 day 83.59. Brazil trades USD onshore and offshore interest rates as well as USD spreads, a true currency as intended from the 1972 free float.

MXN. Target Rate 8.25. Tie rate 91 day 8.52. 91 day Cetes rate 8.09.

ZAR. Sabor Repo Rate 6.74.

PLN. . Reference Rate 1.50. Deposit Rate 0.50.

INR. Policy Rate 6.25. Reverse Repo rate 6.00. Bank Rate 6.50.

MYR. Overnight Rate 3.25. 1 week rate 3.29. Bank Negara just instituted USD Swap rates.


Brian Twomey


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