The overnight repo market....>

US TSYS/OVERNIGHT REPO: The overnight repo market Wednesday saw the U.S.

Treasury two-year note and old three-year note trade tight. Meanwhile the

Treasury General Collateral keyed off the Overnight Bank

Funding Rate (OBFR).

- The Treasury General Collateral rate now pushes "off of OBFR," vs. prior

pattern of the G/C rate keying off the day's one-day Fed Reverse Repo operation,

said traders. (See New York Fed link:

https://apps.newyorkfed.org/markets/autorates/obfr).

- That occurred as the OBFR on Wednesday, Dec. 20th remained at 1.42%, same as

Tuesday, and vs. Monday 1.41% and 1.16% on Dec. 13th, the day the Fed lifted the

fed funds rate by 25 basis points. 

- The current two-year note demand occurred amid shorts related to next week's

2/5/7-year Treasury auctions, said traders. The 2-year note traded at 0.81%,

while the old 3-year note traded at 0.90%. The Treasury General Collateral rate

rose to 1.51%, vs. 1.44%

Wednesday and 1.40% Tuesday.