Global Central Bank Liquidity Announcement

This has come as a massive shot in the arm for the world’s equity markets. This appears to be a multilateral agreement by the world’s leading central banks to ease future interbank liquidity difficulties.

The provision of a cash injection facility was the stimulus that many investors were waiting for before stepping back into the market.

This is a real rabbit from the hat from the Federal Reserve, and explains their reluctance to cut rates by more than a quarter of a point at their meeting on Tuesday.

The coordinative measures should bring the 3 month LIBOR rate, the interbank lending rate that is so crucial to the UK mortgage pricing process, back down towards the base rate level.