NYFed is due to release......>

US TSYS/OVERNIGHT REPO: NYFed is due to release its monthly repo ops schedule at

1500ET. Recall that last month, the schedule came out the day post-FOMC, and the

NYFed surprised the market by raising minimum bid rate on repo ops by 5bps to

IOER+5bps for O/N, IOER+10bps for term.

- Wrightson ICAP doesn't anticipate major changes today: "The Desk may

streamline its operations by suspending its term offerings, but we don't expect

it to push the minimum bid rate on its overnight operations higher - at least

for now...Over time, we would not be surprised to see the minimum bid rate on

overnight RPs rise from 0.15% at present to 0.20% or even 0.25%."

- Last week balances in repo facilities dropped to zero. But as Deutsche notes,

the July 15 tax deadline "could create temporary pressure on repo as corporates

draw down on their cash held at money market funds and individual income tax

payments drain reserve balances from the banking system", potentially driving

leveraged investors back to the Fed's repo ops and pushing private rates higher.

- Deutsche expects any such pressure to be transitory, and sees the Fed

beginning to phase out term repo as well as raising min bid rates again in Aug.