Another two central banks kept rates on hold, with the BoE keeping rates at 0.5% and the Canadian central bank also holding rates.
Much attention was put on whether the comercial bank reserve rate was too be cut to encourage more lending by banks rather then keeping it with the central bank, but this wasn't the case as the reserve rate remained at 0.5%. This lead to a pop up in sterling against other major currencies. This also lead to a sell off in short sterling.
On the Euribor front there has been steepening along the curve which has lasted for about 4 days. As rates in the near term are likely to remain on hold traders are pricing in a series of rate hikes next year. The Shatz-Bund spread has moved almost 200 ticks since last weeks rate meeting as long end yields rise.
It is likely that this curve steepening will continue as economic indicators continue to improve and stock markets are rallying.
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