Respite for the mortgaged after months of terror due to the escalation of the Euribor. The index that serves as a reference for variable mortgages fell three tenths in its daily rate this Tuesday, amid doubts about the stability of smaller US banks and a possible contagion to Europe.
The rate breaks an unstoppable climb in recent months that led it to touch 4% last Thursday, with 3.98%. Since then there have been falls in the daily rate. On Friday at 3.95%, on Monday at 3.86%, today at 3.51%… In just a few days, it fell almost half a point.
“The fall of the Euribor has occurred due to the possibility of a change in course of the rate rise policy of the European Central Bank (ECB). This Thursday a 0.5% rise in interest rates was expected, something that now it is very difficult to confirm,” says Laura Martínez, spokesperson for the comparator iAhorro.
“This possible change in trend could be caused by the bankruptcy of Silicon Valley Bank (SVB). One of the reasons for the fall of this entity is related to the rise in rates of the Federal Reserve (Fed) in recent months. With With this bankruptcy, the Fed and the ECB could reconsider their policy of raising interest rates to control inflation to avoid more bankruptcies, especially in the US, since nothing in Europe points to a possible contagion,” continues Martínez. Precisely the indicator began to fall coinciding with the first alarm signals related to Silicon Valley Bank.
In a similar vein, the IG market analyst, Sergio Ávila, explained to Europa Press that the SVB crisis has revealed a problem that “must be closely monitored”, such as the losses that banks can record in their long-term bond portfolios, since prices have fallen significantly due to “aggressive” interest rate hikes in a short period of time, and their impact on bank liquidity.
This situation has made investors begin to anticipate changes in the direction of rate hikes. The Euribor, which includes the rate at which entities lend to each other, anticipates the evolution of interest rates.
As for the ECB, “it may be a problem that with the continuation of the aggressive policies of the central banks, more entities may find themselves in a similar situation, also in Europe and that includes Spain,” says the expert.
In this way, the situation has been transferred to the Euribor, an indicator that reflects the expectations of the next steps that the ECB can take.
What trend can you follow now? “We will have to wait and see what happens on Thursday and what decision the ECB makes. What is clear is that this year making economic forecasts is a risky sport because in 24 or 48 hours everything can change,” answers Martínez. The big factor to watch, he explains, is the ECB’s decision. If until recently the forecast was for a Euribor at 4%, the outlook now becomes more uncertain.
