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Zero Bids In First Bank Of England Dollar Repo Reopening
As part of the reactivation of its FX swaps with the Federal Reserve, the Bank of England also reactivated its dollar repo operation. As announced, "these operations will be at fixed interest rates with counterparties
able to borrow any amount against eligible collateral. The first tender
will be held on Tuesday 11 May. The Bank will keep the frequency and
maturity of its US dollar operations under review, in light of market
conditions." And in light of the assumed scarcity of dollars in Euroland it was somewhat surprising that today's dollar repo reopening after a 5 month hiatus (the last such transaction occurred on January 27) saw exactly zero bids. We speculate that since the dollar repo was attempted at 10 am GMT, that the swap line is now active, although we have not yet seen anything in the form a term sheet or a press release from the Federal Reserve. But who are we to presume that the Fed would be accountable to anyone, let alone us, and disclose something as irrelevant as information to the general public. Yet the take home is that England, at least so far, is not in need to dollar denominated funding. Which means, as we have long speculated, that "lack of USD liquidity" ground zero is most likely France, and Germany is probably in second place.
The chart below demonstrates total usage of various maturity dollar repos by the BOE. A link to the source excel can be found here.
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i have a Golden Ticket to tour the Willy Wonka factory. The European Banksters with their scheme by the USA Federal Reserve would surely lend me $100 billion for it. It is gold coloured, after all.
I got a Golden Ticket
Well with USD libor higher and the USD libor/OIS spread higher, somebody is still afraid.
When does the ECB get involved?
The Libor Euro/eonia tightened whilst the Libor USD/OIS widened. It is this toxic USD shit again, and again, and again. Someone obviously need USD.
I will gladly give them mine in exchange for historically cheap equities in 12-18 months
Heh. I read the headline and thought (just for a glorious moment) that Zero (Hedge, thatis) had bid...
And of course LIBOR stands for the "London Inter Bank lending Rate" no? Why does that seem like it should be at 40-50% right now? Indeed, maybe it is not because "there's no demand for the greenback" but because that worthless piece of paper is the most expensive thing you'll ever buy. In short...time to burn down Spain because the "insurance" is on that is worth even more than "Greece."
The ECB, BOE and SNB expect to conduct initial operations this week.
Swap activity will be published weekly.
The Federal Reserve also expects to release shortly the underlying legal agreements with foreign central banks.
http://www.federalreserve.gov/newsevents/press/monetary/monetary20100510...
Small initial use of the ECB facility:
http://ftalphaville.ft.com/blog/2010/05/11/223891/eurozone-banks-lap-up-...
Don't forget that we've been suspecting that the US Treasury auctions worked because the Fed gave dollars to the UK, so they could buy our bonds. If true, that means the UK has been skimming US$ all along, and doesn't need anymore.
Maybe with all the TRILLIONS being thrown around, the dollar isn't as scarce as dollar-deflationists would have you believe.
Ouchy.