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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.
BASIS
- In repose to the Covid-19 shock, the Fed, alongside a number of its counterparts including the BOE, ECB and BoJ announced USD swap arrangements, which restored basis swaps to less stressed levels. Central banks will likely be watching these developments closely. Year-end-like stress is unlikely to spook them too much, but more similar sustained or more elevated levels could see swap lines reintroduced.
- It is also worth noting the moves seen in EURUSD risk reverals. EURUSD 3-month 25-delta risk reversals have moved around 55bps since Wednesday to -1.04% and show that demand for EURUSD put options is larger than for EURUSD call options. Risk reversals can also be used for hedging, but again are a long way off the sub -3% levels seen at the time of peak-Covid concerns.
Chart: EURUSD 3-month Basis
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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