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Although cross currency basis swap vis-a-vis.....>

UK
UK: Although cross currency basis swap vis-a-vis the US dollar have generally
tightened, the GBP basis has turned positive.
- The basis reflects a violation of the covered interest rate parity condition
and has been a powerful indicator of relative funding conditions in different
currencies since the financial crisis.
- In the UK's case, liquidity, sovereign credit and counterparty risk do not
seem to be the main driver of a positive GBP basis.
- Instead, demand for hedges from the banking sector is likely one of the root
causes.
- For more information, please refer to "GBP Basis: Regime Change", sent by
email July 2, or contact sales@marketnews.com 

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