Correspondent Blog

The Election and Other Stuff We’ve finally arrived at election week and tomorrow’s results will certainly have an impact on trading not only this week but for some time to come. The one scenario that probably is prone to generate the most volatility would be an inconclusive result on election night. If that were to…

In the last five years, one of the new disciplines in banking that has emerged is the combination of machine learning and satellite imagery to gather bank intelligence on fraud, credit, and bank marketing. While this sounds daunting, in this article, we will show you some relatively simple applications of both artificial intelligence (A.I.) and…

On October 23, 2020, the International Swaps and Derivatives Association (ISDA) published the Fallback Protocol (Protocol) that allows firms that use LIBOR to transition to SOFR if LIBOR becomes unavailable in the future. CenterState Bank’s ARC program allows community banks to offer up to 20-year fixed-rate loans to customers, but retain an adjustable asset priced at…

Halloween is upon us and we mark time until the Tuesday elections and wonder what else 2020 will throw at us?  It has been a year of many more tricks than treats so we wait to see what the year will throw at us next. Speaking of the recent risk-off move, some point to the…

Will Treasury Yields Continue Higher? While this week brings some heavy hitting reports like the first look at third quarter GDP and September Personal Income and Spending the biggest question will be whether Treasury yields continue to drift higher settling into a slightly higher plane of the well-worn range that we’ve seen since March.  Some…

With Stimulus 2.0 now a decidedly after-election event, if even then, the market has turned squarely to virus trends and those haven’t been good.  Combine that with no stimulus anytime soon and that has led to a decent bout of risk-off action this week. As case counts and hospitalization rates continue to increase, combined with…

On October 23, 2020, the International Swaps and Derivatives Association (ISDA) published the much anticipated IBOR Fallback Protocol (Protocol).  Firms that sign up for the Protocol agree to the spread adjustment and the fallback rates if LIBOR becomes unavailable in the future.  Most community banks have some loans or deposits tied to LIBOR, and many…

Economic NewsInitial Jobless ClaimsCopper/Gold Ratio Points to Higher YieldsMarket Rates   Economic News The last of the presidential debates was held Thursday night and while not as explosive as the first debate did have its moments, but probably nothing that will alter the trend in polling. That polling has Biden leading in most of the…

Stimulus fever has hit the bond market as talks between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were deemed positive enough to send 10-year yields above 0.80%, a four-month high, climbing as high as 0.834%. Currently the 10-year yield sits at 0.814%. While the odds of a deal passing prior to the election…

Examining Bond Portfolio Trends: Third Quarter 2020 Beginning in May 2012 we started tracking  portfolio trends of our bond accounting customers here at the Correspondent Division of CenterState Bank.  At present, we account for over 130 client portfolios with a combined book value of $11.5 billion, or $88 million on average per portfolio.  Twelve months…

Election Scenarios, Stimulus and Yields With the week devoid of much first-tier economic releases, Treasuries are likely to drift within the well-worn range that we’ve seen for what seems like forever but stretches back to March. And to be fair, even if we did have some first-tier data to trade around, the market is more…

Since the election falls right in the middle of bank’s budgeting and planning cycles, it is worth spending some time looking at potential outcomes. With a little more than two weeks before the election, the current polls and betting odds favor a Democratic Administration and both houses of Congress.  According to FiveThirtyEight, Biden has a +10.5%…