With the US bent on devaluating the USD and MAS allowing the SGD to appreciate, SOR was driven into its all-time-low territory again, coming in at 0.247% on 3 Nov 2010. Moreover, the Feds initiated a fresh round of measures to spur the US economy, keeping rates at 0-0.25% for an “extended period” and launching a new massive US$600 billion money printing exercise.
This probably means that SOR (and likewise SIBOR) is forced to stay low for some time. A few other trends were also triggered off – gold and commodities prices are up, which equates to inflation, and increased carry trade (notably into the AUD, since the Reserve Bank of Australia recently increased its benchmark cash rate by 0.25% to 4.75%).
A quick check on home loan rates : Best deals from 3m SOR + 0.9% (i.e. about 1.1+%) and 3m SIBOR + 0.65% (i.e. 1.09%) floating and 1.25% fixed. Reason to smile indeed.