as Fed rate cuts loom, secured dollar funding volumes hit all-time highs, while our new money market stress monitor shows little signs of scarce liquidity
Do you mind elaborating a bit more on this point: "With the yield curve uninverting, foreign FX-hedged investors should start returning to dollar markets"? Why would curve uninverting prompt foreign fx-hedged investors back to dollar markets?
With the fed's FX swap lines at OIS+25, why is it that at times (on non qtr end / year end dates) the very short end of USDJPY XC still squeezes and trades well below -50bp etc? Just balance sheet costs of intermediating between a customer (or dealer) vs the fed?
Always appreciate your perfectly detailed but-concise write-ups, Conks.
Chuckled at this:
"QT ends sooner rather than later for reasons we’ll explain in detail in our coming pieces. Note: it has nothing to do with Bollinger Bands."
Enjoy the rest of your weekend.
ha thanks!
Do you mind elaborating a bit more on this point: "With the yield curve uninverting, foreign FX-hedged investors should start returning to dollar markets"? Why would curve uninverting prompt foreign fx-hedged investors back to dollar markets?
i meant "as the Treasury curve steepens" but phrased it as "with the yield curve uninverting"
not the clearest use of words, apologies
With the fed's FX swap lines at OIS+25, why is it that at times (on non qtr end / year end dates) the very short end of USDJPY XC still squeezes and trades well below -50bp etc? Just balance sheet costs of intermediating between a customer (or dealer) vs the fed?
appreciate you! and the arsenal of monitoring tools you’ve built 🫡
Appreciated 😎