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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
The standout surprise in yesterday's weekly Fed balance sheet release was the sharp rise in takeup of the Foreign and International Monetary Authority repo facility. $60B was taken up in the week closing Wednesday 22nd, vs nothing in the previous week, shattering the prior record of $1.4B (FIMA has only been around since Mar 2020 as an emergency pandemic liquidity facility, and made a standing facility in July 2021).
- This is a facility open to foreign central banks / monetary authorities with accounts at the NY Fed who want to repo Treasuries at the Fed in exchange for cash.
- But we don't know which counterparty it was. The fact that it was exactly $60B - which is the maximum for any single counterparty - logically leads to the conclusion that it was one borrower and not multiple.
- In turn most of the speculation that we have seen suggests it was the Swiss National Bank, which is logical given the Swiss authorities were overseeing the Credit Suisse situation, though we haven't seen any confirmation of this (and since FIMA is hardly ever used, it's unclear where/when this disclosure would be made).
- Though the fact that it could be any major central bank has spurred some (potentially groundless) concern about dash for liquidity from an unknown corner of the global financial system.
Source: Fed, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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