25 Mar 2014
US Yields flatten on Fed rate outlook - Danske Bank
FXStreet (Barcelona) - Lars Christensen, Chief Analyst at Danske Bank notes that the US Treasury yield curve flattened again yesterday as the post-FOMC re-pricing of the Fed rate outlook continued.
Key Quotes
“Money market rates are still some 15-30bp below the FOMC Fed funds projections, so there is still room for pricing in a more aggressive hiking cycle. In Europe excess liquidity could drop below EUR100bn today, putting further upward pressure on the short-end money market (EONIA) curve.”
“A sign of the interbank market being tighter would be if we see another failed SMP auction. Taking the latest decline in excess into account, the ECB might still consider stop draining the liquidity given through SMP.”
Key Quotes
“Money market rates are still some 15-30bp below the FOMC Fed funds projections, so there is still room for pricing in a more aggressive hiking cycle. In Europe excess liquidity could drop below EUR100bn today, putting further upward pressure on the short-end money market (EONIA) curve.”
“A sign of the interbank market being tighter would be if we see another failed SMP auction. Taking the latest decline in excess into account, the ECB might still consider stop draining the liquidity given through SMP.”