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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.
FED
It's been fairly quiet on the overnight reverse repo front in the past few weeks since quarter-end. The overall level of takeup sits just shy of $900B as of Jul 22, well below the peak of just under $1T on Jun 30. And it's likewise been fairly uneventful in the overnight rates arena since the Federal Reserve upped the IOER and ON RRP rates by 5bp at the June FOMC meeting, with effective Fed funds printing 10bp every day since (apart from 8bp at quarter end - again on Jun 30).
Source: Federal Reserve, MNI
- As the FOMC goes into its July meeting (Jul 27-28), its leadership is likely to be pleased not to have to contend with major questions over funding market functioning. The growing pile of reserves is the biggest medium-term question: with the TGA is falling as expected, and continued Fed purchases, bank reserves are set to push above $4trn by early August for the first time in two months.
- Wrightson ICAP expects banks to be "willing to carry a somewhat larger amount of reserves for IOER-arbitrage reasons in the weeks ahead", but if that doesn't materialize, then we could see more expansionary pressure on ON RRP takeup.
| Liabilities | Reserves | US Treasury General Account | Reverse Repo (Foreign) | Reverse Repo (Dealers) | Currency In Circulation | Other* |
| Last Week's Net Change (USDbn) | 29.8 | -26.8 | -0.3 | 72.6 | -2.2 | -2.2 |
| 4-Week Net Change (USD bn) | 208.8 | -56.6 | 8.4 | 26.2 | 6.9 | -101.4 |
| Total Holdings (USD bn) | 3974.5 | 678.1 | 250.7 | 886.2 | 2185.3 | 315.0 |
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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