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Money Markets

All articles tagged with #money markets

finance-and-economics2 years ago•1 min saved

"Record Surge in US Overnight Funding Rates as Fed's Reverse Repo Usage Soars at Year-End"

The Federal Reserve Bank of New York reported a significant surge in inflows to its overnight reverse repo facility, reaching $1.018 trillion on the last trading day of the year. This marks the first time inflows have exceeded $1 trillion since November 13, reflecting the facility's role in setting a floor for short-term interest rates. The increase comes as the Fed scales back liquidity and as money market securities become more appealing to investors. Despite the year-end spike, analysts predict a substantial decrease in inflows in the following weeks. No inflows were reported for the Fed's Standing Repo Facility, indicating no major liquidity issues in the money markets.

via Reuters|

#federal-reserve #finance-and-economics #interest-rates

finance2 years ago•0 min saved

Bond Market Faces Funding Strain

Bond traders are facing a new challenge in the form of a surprise squeeze in money markets, potentially caused by a hot new type of funding. The Secured Overnight Financing Rate, a key interest rate benchmark, recently reached a record high, adding to the volatility in the bond market. This unexpected occurrence has raised concerns in the global financing market, where trillions of dollars are borrowed and lent through repo agreements.

via Bloomberg|

#bond-market #finance #funding

finance2 years ago•1 min saved

China Regulators Investigate Record-Breaking 50% Liquidity Stress

Chinese financial regulators are investigating a liquidity crunch at the end of October that caused short-term money rates to surge to as high as 50%. The China Foreign Exchange Trade System (CFETS) has asked institutions to explain why they borrowed at such high rates. The surge in rates was attributed to a month-end scramble for cash and a flood of government bond sales, which created unusual liquidity stress. Some analysts believe that authorities may have wanted to keep yuan liquidity tight to prevent the currency from sliding against the US dollar.

via Reuters|

#china #finance #government-bonds

finance2 years ago•2 min saved

China's Liquidity Squeeze: Institutions Borrowing at 50% Rate

Overnight borrowing costs for some Chinese financial institutions surged to as high as 50% due to a squeeze in liquidity and stressed money markets. The cash shortage was attributed to a flood of upcoming government bond issuance and market fears of default by cash-strapped institutions. The jump in rates raised concerns and reminded traders of a similar cash crunch in 2013. Analysts expect authorities to implement monetary easing measures to address the tight liquidity situation.

via Reuters.com|

#borrowing-costs #china #finance

finance2 years ago•3 min saved

Wealthy Investors Seek Alternatives Amid SVB Collapse Fallout

Wealthy investors and family offices are moving more of their money out of bank cash balances and into Treasurys, money markets and other short-term instruments, following the collapse of Silicon Valley Bank and potential cracks in the network of regional banks. With the rapid Federal Reserve hikes, Treasurys and money markets can now offer a 4% or 5% risk-free return — often double the yield on a savings or checking account. As a result, wealthy investors and family offices have been moving all but a small portion of their cash balances into higher yielding cash-like investments, which are typically not on the balance sheet of the banks.

via CNBC|

#bank-collapse #cash-balances #finance