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| Weekly Interest Rate Tracking |
| August 7, 2008 |
Good Afternoon,
Attached is a PDF copy of Colliers Meredith & Grew's interest rate sheet that includes current and historical Treasury, LIBOR and Prime interest rates, which are updated daily with real time data from Strategic Alliance Mortgage.
We provide these updates on a weekly basis to keep our clients and colleagues aware of rate movements. We hope you find this information helpful.
DOWNLOAD INTEREST RATE SHEET (105KB)
The following Market Perspective provides insights and commentary on breaking news and emerging trends in commercial real estate finance.
- Slate: "The credit crisis turns 1 this month, Business Week writes. What can you say? Certainly not "Many happy returns," Given that the latest government data shows the economy is contracting so quickly that a number of economists now believe "that a recession began late last year." Even though President George W. Bush (and the Washington Post) pointed out that gross domestic product at a 1.9% annualized rate (after adjusting for inflation) during the second quarter, newly revised data showed "the economy contracted at a 0.2% rate in the final three months of 2007," notes the Wall Street Journal. We'll get another barometer today on the potential effects of the credit crunch's terrible 2s when the Bush administration offers up its latest job-market forecast. Analysts suggest 75,000 jobs were lost in July, "signifying the seventh straight month of declines," notes the New York Times."
- Bloomberg: Treasuries advanced today, pushing yields on 2-year notes to the lowest in almost a week, after an unexpected rise in initial jobless claims to a 6-year high fueled concern the U.S. economy continues to weaken. Bonds also gained after AIG Inc., the world's biggest insurer, posted a $5.4 billion loss. The difference in yields between 2- and 10-year notes, known as the yield curve, reached the widest in two months as traders pared bets the Federal Reserve will raise interest rates this year. Ten-year notes yielded 1.51 percentage points more than two-year Treasuries, the most since June 6. The widening spread indicates traders are favoring shorter-term debt, which is more sensitive to the Fed's interest-rate policy. The yield curve was last steeper than 1.55 percentage points on May 8.
- Financial Times: The European Central Bank left interest rates unchanged on Thursday as it tried to balance the competing demands of record inflation and slowing growth in the eurozone. High oil prices pushed eurozone consumer-price rises to a record 4.1% last month, but economic indicators have also begun to signal rapid economic slowdown. The ECB aims to keep inflation just below 2%, at which it deems prices to be stable. But it has shied from saying whether inflation or growth are a bigger headache.
- Bloomberg: A year after losses on U.S. subprime mortgages caused a seizure in credit markets worldwide, European companies are starting to default. As many as 6% to 7% of corporate borrowers may fail to pay debts on time in the next year, a 10-fold increase from July, according to Dresdner Kleinwort, a unit of Germany's third-biggest bank. That would be the highest since July 2003, according to data compiled by Moody's Investors Service, straining an already faltering economy.
- Bloomberg: Confidence in the euro-region's economic outlook fell last month by the most since the Sept. 11 terrorist attacks, the Brussels-based European Commission said July 30. The ECB forecast in June that economic growth will slow to about 1.5% in 2009, from 1.8% this year and 2.7% in 2007.
- Colliers Meredith& Grew: Forward loans will continue to be expensive due to the volatility in the treasury markets. Nonetheless, borrowers may consider the premium worthwhile to lock in rates that are still low relative to the historical average.
- Colliers Meredith & Grew: Ground-up and deep value-add projects will continue to be difficult to finance given uncertainty relative to sale and refinance exit strategies and a pessimistic macroeconomic outlook amidst inflationary pressures.
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| Please contact the Capital Markets Group at Colliers Meredith & Grew with any financing questions.
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Colliers Meredith & Grew is a Boston-based commercial real estate company with integrated service groups including Brokerage, Capital Markets, Counseling & Valuation, Development & Advisory, Investment Sales, and Property & Asset Management. In addition to representing its core clients in New England, Colliers Meredith & Grew provides national and international real estate services to its multi-market clients as a member of Colliers International and as an owner/member of Strategic Alliance Mortgage LLC (SAM). Colliers International is a worldwide affiliation of independently owned and operated companies in more than 290 offices in 61 countries. |
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