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Lot's of chatter today about the sudden.......>

EONIA
EONIA: Lot's of chatter today about the sudden rise in the eonia fixing from
-0.36% to -0.30% without sitting at the month end. This is a very big move. One
of the problems is that excess liquidity in the systems has gradually destroyed
the eonia market and a plot of eonia volumes {EONIVOL index GP } is
averaging around E6bln over the month. Rates are based upon a very thin market.
- Money flowing to and from the ECB counts in the hundreds of billions and is
where the money market really operates.
- We have yet to discover a technical reason for the spike in the eonia rate but
sources believe that it simply reflects a cash flow from a bank that might
reflect a sudden, unexpected need for an interbank loan and is unlikely
structural. However, today is month end and so a quick drop will take an extra
day.

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