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Libor-OIS Surges After ECB's €111 Billion 6 Day Operation Indicates Nothing Is Fixed, ECB Deposit Facility Usage Spiking
After yesterday's €132 billion euro 90 day LTRO seemed to indicate that all is well for European banks and that up to €310 billion of liquidity could be withdrawn, today's stunningly bad result in the follow up 6 Day liquidity providing fine tuning operation, in which another 78 banks bid for €111.2 billion worth of reverse repo cash, at the same rate as yesterday's 90 Day, or 1%, indicated that all is, after all, bad for European banks, who further more can't seem to realize that when given the opportunity to luck up funds for 90 days versus 6 days, you always go for the former. In other words, the liquidity crunch in Europe is just as bad as everyone had feared.
But don't take our word for it: as a result of this disappointing result, Euro LIBOR rates surged Thursday, with the 3-month
LIBOR rate rising more than 1 basis point to hit its highest level since
September 21 last year, Market News reports.
On Thursday, while sterling 3 month LIBOR held steady and dollar 3 month LIBOR declined by a negligible 0.06 bps, euro LIBOR rates surged.
With OIS, a proxy for market interest rate expectations falling markedly, the LIBOR/OIS three month spread widened just over 3.1 basis points on the day.
And just to make things even worse, use of the ECB's deposit facility, is once again climbing to record highs, hitting €309 billion last night, as banks once again have no interest in lending their money out either to each other, at LIBOR/Euribor rates, or to the general population at 29.95% APR.
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Tyler prepare to tape CNBC because Kanjorski is about to appear on Squawk to inform of the impending market mushroom clouds if we do not obey banks.
Meanwhile Senator Kaufman was just on calling for Glass-Steagall again like a good man.
And of course, Kanjorski makes an ass out of himself again. All he cares about is Democrat/Republican, he has no sense of the underlying problems. Even Joe Kernan just called him out on it, and he still refuses it.
Did you hear him say " Fannie and Freddie are in the bil we have the authority"
What a joker this guy is and at least Bacchus called him out when he said," I must have missed FNM & Freddie in the bill as a matter of fact you blocked any voting on an amendment to bring it into the bill"
There is no chance he can believe this nonsense he regurgitates about being able to seize banks and intervene BEFORE they become a problem. And what was Joe Kernan doing sounding rational? hmmmm
Yea, Bacchus specifically mentioned sections 204 and 210 so we need to get a look at those pages and see what exactly they are hooking the taxpayer for. He sounded like its more bailout clauses. Tyler you got a copy of the bill for those sections??
It's 2000 pages of rambling so he is awaiting Johnny Five to find those sections.
"Need more input!!"
I thought the demand for these facilities came in much lower than expected? I can understand some of the fears but I have wonder about the impartiality of a commentator who describes a 1.5bps move a "surge".
that is a pretty strong move for Libor
Here is the market news headline:
LIBOR/OIS: Euro LIBORs Surge Post ECB 6-Day Operationfeel free to contact their editorial department with your impartiality concerns.
+1 OUCH!
Strictly blood & guts for this site Murchadh.
There seems to be a bit of a surge going on alright...
"Surge" Libor-OIS widens out 2 bp in euro, 0.4 bp in $
"climbing to record highs" - deposits hit EUR384 bln on 6/11, 25% above the current level.
The rate of increase here is much higher then it was when it was at 384 and followed by the monthly reset of the facility. Give it a week.
2.2% is a sharp rate of increase? You do realize that among other things it was the last day of the quarter.
Don't let it be forgot
That once there was a spot,
For one brief, shining moment
That was known as Camelot.
http://www.zerohedge.com/article/wall-street-back-its-criminal-ways-1 (for example)
On second thought, let's not go to Camelot. 'Tis a silly place...
This fits the slow mo crash model I've had in mind for the larger economy and markets. It's slow mo due to unprecedented bazooka-level intervention and manipulation. Bernanke and all the Keynesians tried to drown the world in liquidity. They never realized they were killing us with kindness as it didn't alter the underlying trend. Worse it caused undesirable side effects that I believe will hasten the end run at the end.
WTF gives with EUR/USD? Jump not being replicated against JPY, CHF, GBP. Anybody hearing anything about intervention?
1.25 here we come.
Huge expiries at 1.2400-1.2500 (talk of EUR 1bln each).
Ah, makes sense. How can I complain when it's being manipulated for the greater good (of the banks)?
@scratch_and_sniff: only "1bn" ? The Chinese or Russians being made happy ? :=))
Dont know who lifted them, but there is more than that. Best ones i have heard of is the 1bln's and theres a 750mln, then several V-large digitals at 1.25.
EXTERMINATE!
Well, UBS upgrade FedEx, UPS. BMO upgrade Home Depot, Lowe´s. That´s all I want to say today.
Desperate interventions by central banks this AM. Gold, Eur/USD. They see the apocalypse at every corner. Some barbarians are gathering at the gates.
Euro tops $1.24 as sovereign debt fears fade
By Deborah Levine
NEW YORK (MarketWatch) -- The euro rose against the dollar, breaking the $1.24 level, after a successful bond sale by Spain and banks rolled over fewer loans from the European Central Bank than some feared. "It seems that appetite for government debt remains alive and that fears for Eurozone sovereign risk may be slimming at the margin," said Andrew Wilkinson, senior market analyst at Interactive Brokers.
http://www.marketwatch.com/story/euro-tops-124-as-sovereign-debt-fears-f...
EURUSD buying support detected for some time now, has returned again and the daily chart is now neutral to bullish.
http://stockmarket618.wordpress.com/about
Certainly a lot of details like that to take into consideration. Thanks windows vps | cheap vps | cheap hosting | forex vps