Curve

Uncertainty and liquidity worries have continued to place severe pressure on European markets and concerns about developments in the Korean peninsula put severe pressure on those markets yesterday. USA markets were under pressure last night at one point but recovered to largely hold ground.

The volatility has created an interesting dislocate in the yield curve. The 90 day rate and one year rate are now the same with the 120 to 180 day rates all being higher. The drop in the 1 year rate has made AMP's long standing 1 year special at 6.31% look very attractive. It's 147 points over wholesale rates.