Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

U.S. overnight repo rate eases after Monday's funding pressure

08/03/2021 | 04:03pm EDT
FILE PHOTO: The Federal Reserve in Washington

NEW YORK (Reuters) - The U.S. overnight repurchase rate fell on Tuesday, a day after funding pressures lifted the general collateral (GC) repo rate as high as 0.12% due to the settlement of last week's Treasury auctions, traders said.

The overnight repo rate measures the cost of borrowing short-term cash using Treasuries or other debt securities as collateral.

Analysts expect repo rates to remain steady this week at 0.05% to 0.06% after a blip up on Monday.

One of many overnight repo rates, the GC rate refers to the level or figure corresponding to a basket of securities that trade normally. GC securities can be substituted for one another without changing the repo rate.

On Tuesday, the GC rate hit a high of 0.10% before closing at 0.04%, data from Curvature Securities showed. The repo rate hit a peak of 0.12% on Monday, the highest since February, and closed at 0.10%.

"No doubt the settlement of the 2-year, 5-year, and 7-year added to the pressure," said Scott Skyrm, executive vice president in fixed income and repo at Curvature Securities in New York.

Last week, the U.S. Treasury sold $183 billion in notes of those maturities.

Skyrm said lingering month-end pressure had also pushed repo rates higher on Monday, although Friday, the last trading day of July, saw funding rates at an average of 0.04%.

Lou Crandall, chief economist at Wrightson ICAP, said Monday's unexpected rise in repo rates attracted cash that would have otherwise gone to the Federal Reserve's reverse repo facility.

On Tuesday, the reverse repo volume was $909.42 billion, down from $921.32 billion on Monday. On Friday, it hit a record $1.04 trillion.

The Fed launched its reverse repo program in 2013 to mop up excess cash and create a strict floor under market rates, particularly its policy rate. Eligible counterparties lend cash to the Fed in return for Treasury collateral on an overnight basis.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Barbara Lewis and Richard Chang)

By Gertrude Chavez-Dreyfuss


© Reuters 2021
Latest news "Economy & Forex"
09:00aUK business minister meets energy bosses over soaring gas prices
RE
08:04aGermany's Laschet says trusts ECB to keep inflation in check
RE
07:46aMalaysia warns new Indo-Pacific pact may trigger nuclear arms race
RE
06:41aAustralia made 'huge' mistake' cancelling submarine deal, says French ambassador
RE
06:29aChina will steadily promote yuan internationalisation in 2021, central bank says
RE
05:50aChina's August exports to North Korea up for third month
RE
05:31aFactbox-Key economic policy stances of candidates to be Japan's next PM
RE
03:43aJapan's PM contender Kishida says won't raise sales tax for a decade
RE
03:36aGoogle says it will work with india antitrust authority to show android has led to more competition, not less
RE
03:36aGoogle practices led to unfair condition on device manufacturers in india – antitrust report
RE
Latest news "Economy & Forex"