Euribor rates will not fall next year, but their rise may stop next year, the latest presentation of the Nordic Outlook economic review said on Wednesday.SEB Ingus Grasis, investment strategist of banka’s “Private Banking”.
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He predicted that Euribor rates are likely to remain stable within 2-3% next year.
At the same time, Grasis stressed that there is no reason to expect Euribor rates to fall to 0%. It is likely that rates will remain at their current level for a long time, however, taking into account the risk factor of inflation, potential borrowers should assess their ability to make loan payments even at 5-6% Euribor rates.
Grasis said that inflation has significantly hit the bond market this year, including the hardest-hit bond market.
He said that 2022 is historically the worst year for debt investment: while bonds have periodically suffered losses of 4-5% with a rapid recovery, this year they have fallen by 20%. Currently, the losses of investors invested in euro debt securities are around 15%.
However, Grasis said that currently rates of yield have increased from previously close to 0% to around 4-5%, so the bond market has become attractive for investors looking to buy safe bonds.
On the other hand, the stock market has held up well this year, and despite the inflation, the energy crisis, the war in Ukraine, the Covid-19 crisis in China, the average annual loss of the stock is around 8%, said Grasis.
He explained that one reason for that resilience is that global companies continue to make money and don’t face major problems.
Grasis acknowledged that the stock market will continue to be volatile over the next 12 months.
