Nordea Markets analysts are expecting USD liquidity to turn ampler over next couple of weeks, with looming debt ceiling deadline.
Key Quotes
“US treasury cash balance stands at 361bn, & we expect to see that figure as low as 200bn around 1st of March.”
“The commercial banking system will be on the receiving end of those 160bn, which could prove a USD negative scenario now that the big SOMA-day on Friday the 15th is behind us.”
“The tightening of Libor/OIS spreads has already started, and we expect more to come.”
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