March 9, 2020 / 12:12 PM / a month ago

Euro/dollar swap spreads hit five-month high

LONDON, March 9 (Reuters) - Spreads in euro-dollar cross currency basis swaps for three-month maturities, a gauge of demand for U.S. dollars via money markets, widened to their highest in five months on Monday as a collapse in oil prices reverberated through wider markets.

Spreads on three-month swaps widened to 26 basis points (bps), its widest since early October 2019, and were approaching a 2019 high of 32 bps. Yet they were still some distance from the eurozone crisis peaks of more than 150 bps in 2011/2012.

While the immediate cause behind the spread widening was unclear, traders said the rising costs of paying for U.S. dollar for a European bank wasn’t indicative of a lurking funding crisis in money markets yet.

The widening in spreads comes at a time when the Federal Reserve Bank of New York on Monday said it had increased its daily cash injections to the banking system to ensure an ample supply of bank reserves. (Reporting by Saikat Chatterjee; Editing by Karin Strohecker)

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