Weak energy and equities and concern over Chinese economic growth have kept interest rates in Europe and the US near record lows in recent days, but there are signs some investors are beginning to have a change of heart, analysts say. At the short end of the European interest rate curve, the spread between overnight index swaps and term Libor tightened late last week, reversing the OIS receiving trend and dampening expectations for further ECB deposit rate cuts. Inflation data for France, Greece and Portugal meanwhile came in a little stronger than expected. In the US, inflation-linked securities have remained surprisingly well bid, bankers report, despite the near 20% drop in the price of Brent crude oil over the past month.
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