Unlike the visible evolution in equities or FX trading, the IRS market—especially the interdealer segment—has lagged behind ...

Our recent article, Swaps and Basis Trades Warn Of Mounting Liquidity Problems, touched on negative interest rate swap spreads as an omen of potential liquidity problems. To stay on the topic of ...

Our recent article, Swaps and Basis Trades Warn Of Mounting Liquidity Problems, touched on negative interest rate swap spreads as an omen of potential liquidity problems. To stay on the topic of ...

An interest rate swap is a derivative instrument, meaning its pricing is derived from another asset. Specifically, they are contracts in which two counterparties agree to swap streams of cash ...

This is known as a ‘basis swap’. Ultimately, interest rate swaps come down to two or more parties agreeing to swap one set of cash flows for another. A company may only be able to secure a loan at a ...

Challenges and Considerations in utilising the CCIRS as a hedge While Cross-Currency Interest Rate Swaps (CCIRS) offer substantial benefits, businesses must consider several factors before ...

The example below illustrates how Cross-Currency Interest Rate Swaps (CCIRS) work in practice. Consider a Ghanaian company, ABC Ltd, that borrows $10 million in USD for five years at a floating ...

Therefore, the two banks agree to enter into an interest rate swap contract. Bank ABC agrees to pay bank DEF the SOFR plus 3% per month on the notional amount of $10 million.

Matthew Franklin-Lyons, JP Morgan The market consensus on rate cuts meant one-versus-five-year three-month forwards were around 30bp steeper relative to spot, providing an attractive entry point for a ...

Key Takeaways Interest rate swaps are most commonly used as a tool to hedge against changing interest rates. Swaps can be cost-effective in managing interest rate risk. There are a variety of ...