One month after Fannie Mae became the first issuer to sell debt linked to the Libor alternative, Barclays became the first bank to issue commercial paper tied to the funding benchmark known as the secured overnight financing rate, or SOFR.
“You’re collapsing a traditional bond issuance from a manual bookbuild process and allocation process, an extended settlement then a registrar and a custodian, into something that could happen online instantaneously.”
In a quiet overnight session, the dollar dropped set for its biggest weekly decline since March as traders prepared for a keynote speech by Fed chair Jerome Powell. Global stocks rose despite disappointment from the latest US-China trade talks as Beijing again intervened to prop up markets.
Only severe domestic pain would change the US narrative. The easiest way to see how it might happen is if the US$ massively overshoots, and then blows back via various transmission mechanisms (from liquidity to SPX EPS growth rates).