After Brief Dip, 3 Month Euribor Continues Upward Advance, Allied Irish, DZ Bank Offer Worst Rates

Tyler Durden's picture

After 3 Month Euribor dipped on Friday for the first time in 3 months from a 2010 high of 0.899% to 0.896%, the critical interbank lending metric has once again resumed its steady advance higher, with the August 2 fixing coming in at 0.898%. And as has been postulated previously, a rise in overnight funding immediately leads to a rise in various EUR pairs. At last check the EURUSD was up to $1.3071, as the pair mimics each tick in (deteriorating) money market conditions.

From from Dow Jones:

The cost of borrowing euros in the interbank market ticked slightly higher Monday, having fallen for the first time in over three months on Friday.

The three-month Euro Interbank Offered Rate, or Euribor, the rate at which interbank term deposits in the monetary union are offered, rose to 0.898% Monday from 0.896% Friday, when it had fallen for the first time since April 20.

Euribor is tracked more widely than its London Interbank Offered Rate euro counterpart, and is used to benchmark a wider range of assets.

Erste Bank in Vienna offered a rate of 0.95% while Allied Irish Banks and DZ Bank quoted a rate of 0.94%. HSBC offered the lowest rate of 0.81%.

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Oh regional Indian's picture

Upwards and onwards!

Oh wait, in this case it would be upwards and downwards (all fall etc.).

Japan's borrowing costs _headed up. Europe's borrowing costs-headed up.

I think only "developing" economies will have easy credit regimes for a while. THey after all have all those "savers" that need to be disincentivized to save and incentivized to buy.

Plus, we (like India) have a long way to fall. The west is scraping the bottom of the rate barrel already. Of course up is the only way.

A tightening this way comes. Ufffff! Going to hurt! 


Wheatman's picture

Will someone please explain whether Tyler is long or short EUR/USD, because someone is losing a fortune over shorting Europe right now.

plocequ1's picture

Eubior, Libor, Ava Gabor, Eva Gabor, Roger Moore... What the fuck difference does it make. The futures are now 90. Can someone please explain what is the reason for this?

mephisto's picture

1. Never be short the first day of the month.

2. HSBC good results.

3. Chinese PMI bad but not awful.

4. Volume abysmal in Europe, even the bots are on holiday.

5. Various FX-equity correlations causing equity buying for those who believe in these things.

Welcome to fight club.

mephisto's picture

Ha, no, not needed yet today. IMO we'll proably go higher on the open to force monthly buyers to pay higher, then wait for ISM.

If we aren't lower by close of Tuesday then yes, he's probably involved somehow.

Pamela Anderson's picture

To me he represents "excess liquidity out there trying to find a home"... even if ISM is bad this thing is going to hold... it's not him "per se" holding it.... but who else propitiated this swamp of cheap money...

newstreet's picture

Fade ZH, works for me.  It's like looking around in the pit, trying to get a feel for which way it is leaning, then going the other way.

Ivanovich's picture

Exactly.  Anyone fading the doom and gloom here has certainly made money.  Market sure as hell doesn't care about all the bad "news".

homersimpson's picture

In other words, pray that the dealer lands you blackjack when you're holding 16...

mephisto's picture

True for the past 3 weeks only. Check the weekly charts, if I didn't read ZH I wouldn't understand why the markets were only flat on the year. 

Pamela Anderson's picture

ZH is not doom and gloom... is the reality out there. This market is just awash in liquidity trying to find a home... at some point the market is going to catch with the reality... your job as a trader is to try to find the right balance that will let you ride both waves... no one knows when this is going to happen (that market catches the reality)... as Bernanke's father pointed out : "Markets can remain irrational longer than you can remain solvent".

Let me put this in simple terms: If you are sure that is going to be raining but you don't know when and you need to go outside to work what do you do....

1) put your yellow raincoat and boots and go outside with no rain

2) go outside and have your yellow coat and boots handy

3) I don't go outside... it can rain at any second.

ZH is the best thing out there since the invention of women and Swiss chocolate...

jbc77's picture

The main stream says European manufactoring is boomin' and zoomin'....they also say the Euro recovery is well underway. No need to worry about Euro debt problems anymore, everything is fine. Under control.

Logic, reason and fundementals no longer matter in this world. Bad news doesn't matter, nothing matters as long as the markets can be pushed higher.

Central banks chalk up another win.


newstreet's picture

I'd like nothing more than to catch a "Cardinal Climax" ride down into the abyss, but it's just not happening.  In fact, the Euro just made a new high for the move (Richard Dennis would be buying here).  So what are we supposed to do, fight it or try to catch the top? 

dvsteenk's picture

Looks like July-August 2009 all over again, they induce a sneaking ramp-up by using futures as sentiment manipulators. Probably connected with parallel trades in some other asset, causing the squeeze-out of shorts. It worked last year, seems to work again...