… rising interest rates?
Floating-rate residential bonds benefit from rising interest rates. Given that these bonds ("floaters") have their interest rate periodically adjusted to a referential rate such as the Euribor, an increase in the level of interest rates also means a rising interest rate for the bond. The price of the bond tends to oscillate around face value.
… stable interest rates?
In the case of stable interest rates, neither the price nor the coupon of the floating-rate residential bond changes.
… falling interest rates?
Falling interest rates have a negative impact on floating-rate residential bonds. Given that these bonds ("floaters") have their interest rate periodically adjusted to a referential rate such as the Euribor, a decrease in the level of interest rates also means a falling interest rate for the bond. The price of the bond tends to oscillate around face value.