Oversubscribed Fed Repo Operation Shows Thirst for Year-End Cash

This post was originally published on this site

© Reuters. Oversubscribed Fed Repo Operation Shows Thirst for Year-End Cash© Reuters. Oversubscribed Fed Repo Operation Shows Thirst for Year-End Cash

(Bloomberg) — Money-market participants wary of year-end funding pressures are taking advantage of cash being offered by the Federal Reserve to carry them through the rest of 2019, with the central bank’s term repurchase-agreement operation oversubscribed once again on Monday.

The Federal Reserve Bank of New York’s 42-day term repo operation attracted $42.55 billion in bids, more than the $25 billion on offer. This action, with a maturity of Jan. 13, 2020, was the second of three operations to provide funding past the year-end period.

The maximum size of the Dec. 2 term operation was increased last week to $25 billion from its initial amount of at least $15 billion after the central bank’s first year-end offering was oversubscribed. Market participants had submitted $49.05 billion in bids for the 42-day term action on Nov. 25, which was more than the $25 billion available.

The third action to provide year-end funding is scheduled to take place on Dec. 9, when the Fed will offer at least $15 billion of 28-day cash.

The Fed’s overnight repo operation, as has been the case with most such actions recently, was undersubscribed on Monday. It attracted $72.9 billion of bids, less than the maximum offering size of $120 billion.

(Updates throughout, adds details of overnight operation and analyst comment.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.