{"id":50029,"date":"2019-12-09T08:59:02","date_gmt":"2019-12-09T13:59:02","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50029"},"modified":"2019-12-09T08:59:05","modified_gmt":"2019-12-09T13:59:05","slug":"feds-third-year-end-repo-oversubscribed-again-amid-liquiduity-scramble-as-dec-16-tax-day-looms","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50029","title":{"rendered":"Fed&#8217;s Third &#8220;Year-End&#8221; Repo Oversubscribed Again Amid Liquiduity Scramble As Dec 16 Tax Day Looms"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.zerohedge.com\/markets\/feds-third-year-end-repo-oversubscribed-again-amid-liquiduity-scramble-dec-16-tax-day-looms\">Fed&#8217;s Third &#8220;Year-End&#8221; Repo Oversubscribed Again Amid Liquiduity Scramble As Dec 16 Tax Day Looms<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One week after the Fed&#8217;s second 42-day term repo which allowed dealers to lock in funding into the new year and which was again oversubscribed, confirming a growing scramble for year-end funding, traders were looking ahead to the result from today&#8217;s third &#8220;year-end&#8221; repo, this time with a 28-day term maturing on January 6. And, as we noted last week,&nbsp;<strong>year-end liquidity fears remain front and center as the $25 billion &#8211; which the Fed expanded from $15 billion late last week &#8211; proved to again be roughly 40% below the required size to satisfy all liquidity demands.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Dealers&nbsp;<a href=\"https:\/\/apps.newyorkfed.org\/markets\/autorates\/temp\">submitted&nbsp;<\/a>$43 BN in bids for the 28-day op ($29.80 BN in Treasurys, $0.1BN in Agency, $13.1BN in MBS paper), resulting in an oversubscription of the $25BN in available repo, and confirming that the Fed may have to add additional &#8220;year-end&#8221; repos to satisfy all dealer liquidity demand as we enter 2020.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/28%20day%20repo%20dec%209.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">This was modestly above the $42.550 billion submitted last week in the second 42-day repo operation\u00a0<a href=\"https:\/\/www.zerohedge.com\/markets\/feds-42-day-repo-2x-oversubscribed-scramble-year-end-liquidity\">conducted on December 2<\/a>:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/repo%2012.2%2042%20day.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, the Fed also announced that in the latest overnight repo, it had accepted $56.4 billion in securities, a modest drop from the recent range and the lowest roll amount since the Fed expanded the available size of overnight repos to $100 billion. A big reason for this is likely that $25 billion was shifted over from overnight to 28-day term repos.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/2019-12-09.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The biggest concern: the repo rate over year end remains stubbornly stuck well above 3%, more than double the Fed Fund rate, and clear evidence that the US interbank plumbing remains broken.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fed&#8217;s Third &#8220;Year-End&#8221; Repo Oversubscribed Again Amid Liquiduity Scramble As Dec 16 Tax Day Looms One week after the Fed&#8217;s second 42-day term repo which allowed dealers to lock in funding into the new year and which was again oversubscribed, confirming a growing scramble for year-end funding, traders were looking ahead to the result from [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,487,3650,4318],"class_list":["post-50029","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-liquidity","tag-us-federal-reserve","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50029","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50029"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50029\/revisions"}],"predecessor-version":[{"id":50030,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50029\/revisions\/50030"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50029"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50029"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50029"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}