June 5, 2012 / 4:41 PM / 5 years ago

MONEY MARKETS-Dollar rates slip on more cash supply

 * U.S. repo rates fall on more cash available
 * U.S. swap rates fall, Eurodollar futures rise
 * Solid demand for T-bills as Europe worries persist
 * No dollar Libor fixings for a second day

 (Updates with U.S. action, changes byline, dateline, previous
London)	
 By Richard Leong	
 NEW YORK, June 5 (Reuters) - Investors charged banks and
bond dealers less to borrow dollars on Tuesday as they showed
more willingness to part with cash on hopes the world's top
economies make progress in containing the euro zone's debt
crisis.	
 Finance ministers from the Group of Seven major economies
talked about steps towards a financial and fiscal union in
Europe, the U.S. Treasury Department said on Tuesday after G7
finance chiefs held an emergency call on the region's debt 
problem. {ID:nW1E8EM02J]	
 The urgency for a solution to the crisis has intensified as
cash-strapped Spain said its access to credit markets was drying
up. 	
 Hopes for a comprehensive plan to the euro zone debt crisis
led some investors to release more cash to lend in the $1.6
tri-party repurchase agreement market, traders and analysts
said.	
 "We have seen a bit more cash coming into the market," said
Raymond Gilmartin, head of repo trading at Bank of Nova Scotia
in New York.	
 The overnight rate on repos secured by U.S. government debt
was traded as low as 0.18 percent with most trades cleared at
0.23 percent earlier, traders said.	
 On Monday, overnight repo rates ended about 0.25 percent
, according to Reuters data.	
 In the derivatives market, the rates on short-term dollar
interest swaps fell, while Eurodollar futures <0#ED:> rose,
implying traders expect interbank costs for dollar will fall.	
 The two-year swap rate, a gauge of short-term
private credit costs in dollars, fell about 1.5 basis points at
about 61 basis points, while its premium over comparable U.S.
Treasuries fell for a second day to 36.25 basis
points.	
 The December 2014 Eurodollar contract rose 2 basis
points to 99.120. It hit a contract high of 99.195 on Friday.	
 	
 Still risk aversion remains elevated on lingering
nervousness about Europe and pending downgrades from Moody's
Investors Service on global investment banks which rely on the
repo market and other wholesale channels to finance their trades
and operations, analysts said.	
 This climate fed demand for Treasury bills and other
cash-equivalent assets. 	
 The U.S. Treasury Department on Tuesday sold $30 billion
worth of one-month or four-week bills at an
interest rate of 0.04 percent. [ID:nEAP10D500}	
 This was the lowest rate on new one-month T-bills since an
auction held on Jan. 24 when one-month supply was sold at 0.02
percent. 	
 There were no fixings of London interbank offered rates on
sterling or dollar on Tuesday because of a holiday in the United
Kingdom. 	
 On Friday, the three-month dollar Libor was
fixed at 0.46785 percent, rising for the first time since May
16.    	
	
 (Editing by Kenneth Barry)	
 

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below