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SymbolicBlogNoticiasThe coronavirus also affects the Euribor, which points to historical lows

The coronavirus also affects the Euribor, which points to historical lows

11 Mar
Symbolic Wednesday March 11th, 2020 0

The fear that has been installed in the markets around the world by the coronavirus has also caused a downward reaction of the Euribor, the main indicator of mortgages in Spain. The index has started the month of March with a sharp fall and threatens to beat again the historical lows of August 2019, when it closed at -0.356%.

Last week, the Federal Reserve (Fed) decided, by surprise, to lower interest rates, and now the market has its eyes on the European Central Bank (ECB) chaired by Christine Lagarde and whose monthly meeting takes place this Thursday . The market has on the table the possibility of a cut in the price of money and this has been reflected by the Euribor in the last week of the ECB at the beginning of the week to get to bet with 89%. A decision that, like that of the Fed and other central banks, would be framed within a coordinated action between the world’s leading monetary and fiscal institutions to reach out to economically weaker geographies.

Historically, there is a correlation between the evolution of interest rates and the Euribor. And this seems to be already discounting a reduction of the ECB.

Although it is still too early to anticipate a new historical low – there is still a little more than three weeks of contributions for the end of the month – the truth is that a new relapse of the Euribor would anticipate further reductions in the mortgage payment and could force the Analysts to review, for the umpteenth time, their forecasts regarding the evolution of the index, which could further delay their return to positive territory.

The Euribor celebrated last February four years since it entered negative territory for the first time in its history, which has allowed thousands of mortgaged people to save themselves a good pinch in their mortgage payments. The main indicator of variable mortgages in Spain was dyed red for the first time in February 2016, when it said goodbye to the month at -0.008%, and since then it has not been able to approach positive ground.

Last February, the Euribor said goodbye at -0.288% and the average for February stands at -0.352%, very close to -0.356% in August 2019. Analysts expect the Euribor not to return to positive ground At least until 2021.

Bankinter, for example, sets for this year a central scenario for the indicator at -0.22%, although it considers that it could move between a minimum of -0.27% – far from the historical lows of August – and a maximum of -0.17%. On the other hand, within a year, the central scenario managed by the orange entity is -0.10%, with a pessimistic scenario of -0.15% and an optimistic scenario of -0.05%. That is, within two years, Bankinter still places the indicator slightly negative.

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