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NYFed unexpectedly hiked.....>

US TSYS/OVERNIGHT REPO
US TSYS/OVERNIGHT REPO: NYFed unexpectedly hiked the minimum bid on overnight
repo ops by 5bps to 15bps late Thursday (IOER+5bps). Monthly up to IOER +10bps.
Eurodollar futures strip has shifted accordingly.
- Also beginning June 22, O/N operations to be moved to the afternoon.
- Fed had signaled in April FOMC minutes that it was under consideration so not
completely out of the blue, and in Thu's notice cited "the substantial
improvements in U.S. dollar funding market conditions".
- But this still appeared to take most off guard. BofA wrote earlier this month
they thought the Fed would pull the trigger, but at the FOMC; BMO FICC and
Wrightson ICAP had expected it to wait, citing - respectively - already-squeezed
funding conditions, and July's delayed tax date.

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