European Liquidity Update: Horrible And Getting Worse

Don't expect any good news in a post that has "European Liquidity" in the headline. While Euribor-OIS up from 0.81 to 0.82%, still 7 bps below the 2.5 year record of 0.89% from September 23, 3M USD Libor grinds once again wider from 0.378% to 0.381%, 50th consecutive increase, as UBS now has the spotlight with a 9th consecutive rise in its rate from 0.411% to 0.416%. Credit Agricole continues to be troubling and widest at 0.4375%, up from 0.435%. But most disturbing is that the deposits with the ECB soared to a new multi-year high of €209 billion, up from the €200 billion yesterday which we noted. And while none of this is surprising, we had some out of leftfield news coming from Deutsche Bank which announced it had taken €250 million in Greece-related charges after it had proclaimed for months its exposure was negligible and saw no write down risk. DB also said it won't make a €10 billion profit this year as had been promised earlier. So much for "them" not lying to "us."  The "us" response: DB CDS +15 at 224 bps at last check and moving wider, even as German CDS probes new record levels. At this point comparing 2011 to 2008 is no longer cool, but we will refer readers to this post from last night...


No comments yet! Be the first to add yours.