Wholesale interest rate swap yields have been climbing steadily since the beginning of the year.

The long period of low rates may be coming to an end.

Yields generally are now back to levels last seen in April 2012.

The most notable rises have been in the middle of the swap curve - three through seven years.

At the same time, corporate bond yields have also been rising. Government Bonds and Local Government Funding Agency (LGFA) yields are rising as well as illustrated in our charts.

These rises come at a time when some banks are promoting fixed rate mortgage specials.

In light of the wholesale swap rate rises, those mortgage rates offers look particularly aggressive.

Unless the rising wholesale trend subsides, it is hard to see current mortgage rate offers lasting much longer (although some specials may be being funded from targeted funding sources).

Term deposit investors would expect to start benefiting from market rate rises.

Some banks have a history of pricing term deposits off of wholesale benchmarks, banks like RaboDirect. Moves by such banks will help start the others.

But as banks are awash in funding at present, and the growth of credit demand is modest, there is no special pressure for the main banks to up their offers to investors. Further, all banks are comfortably abover theor Core Funding obligation. And, the cost of sourcing funds from offshore markets is actually decreasing with credit spreads at their lowest level since the middle of 2011.

Where to from here?

If you want a view of future rate directions, the commentary by Bernard Hickey and the main bank economists can be found in our story here.