New facilities from the ECB help alleviate a little bit of funding pressure however the Libor setting continues to trend higher.
From today's accutic plus report:
Also fascinating this morning has been the uptick in Eurodollar futures. There was strong participation in the 84 day facility provided by the ECB 50 bln. euro’s worth. This is one of the new facilities the ECB introduced to allow banks to fund themselves for longer periods of time – which clearly removes the stigma associated with having to show up at the one week facility week after week after week after wee – etc. Activity in the Eurodollar options clearly reflecting this and volume is even more robust today than yesterday’s activity which was more on the bearish side.
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