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/REPO. Strategist, Subhrajit Banerjee at......>

EONIA
EONIA: /REPO. Strategist, Subhrajit Banerjee at HSBC is "less fearful of a
likely repeat of a sharp German repo squeeze this year end".
- HSBC says that there is "anecdotal evidence" that the German Finanzagentur
might be active in the repo market, lending securities to dealers. Apparently,
the Finanzagentur did something similar in June 2017. Evidence that this is
happening could be the rise in 'autonomous factors' within ECB liquidity data.
- According to HSBC, the market currently prices in year end repo at -3%, -2%
and -0.55% for German, French and Italian GC respectively. Remember that German
GC went to -5% at year end 2016.

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