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by Ashraf Laidi
Posted: Feb 20, 2010 5:00
Comments: 30765
Forum Topic:

EUR

Discuss EUR in this thread
 
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macrosam
United States
Posts: 190
14 years ago
Jul 12, 2010 20:23
realize you understand, just wanted to expound for other readers
macrosam
United States
Posts: 190
14 years ago
Jul 12, 2010 20:18
otherwise agree with you, Ashraf
macrosam
United States
Posts: 190
14 years ago
Jul 12, 2010 20:18
The expiration of the 12-month repo drains the excess liquidity from the system, though this will still take some time are there is still the 3-mo LTRO and weekly MRO available.

Since the full-allocation repos were introduced, banks took more liquidity than needed, evidenced by the recycling of this excess at the ECB deposit facility. This drove EONIA down close to the Deposit Rate. When liquidity is equal to need (no excess), EONIA should trade close to the refi rate. Banks pay 75bps in negative carry when depositing at the ECB. Banks will only be willing to incur the 75bps of negative carry for so long.

This all assumes there is no looming catastrophe that reinforces the demand for excess liquidity. A big assumption to make.
Ashraf Laidi
London, UK
Posts: 0
14 years ago
Jul 12, 2010 20:05
Macrosam, wouldnt you think the forces driving EONIA towards 1% could very well be liquidity tensions and fears of default, in which case will bring back more ECB buying?

Ashraf
macrosam
United States
Posts: 190
14 years ago
Jul 12, 2010 14:23
Excess liquidity is being drained, EONIA should migrate back close to the refi rate over summer, should strengthen EUR
nido
karachi, Pakistan
Posts: 23
14 years ago
Jul 12, 2010 11:01
In short term buying trend Buy euro now target will be 2690 around
thnx
rrose
United States
Posted Anonymously
14 years ago
Jul 12, 2010 9:46
going long stops at 8685 looking for 88
catnip
Frankfurt, Germany
Posted Anonymously
14 years ago
Jul 12, 2010 9:43
new rumors flaring up eurozone breakup due to fundamental imbalance of national economies' strengths 1256 appears a temporally support on eurusd
catnip
Frankfurt, Germany
Posted Anonymously
14 years ago
Jul 12, 2010 7:39
entry eurusd short @126 tp @1258 stop buy eurusd long @12625
Coach
Singapore, Singapore
Posts: 43
14 years ago
Jul 12, 2010 7:27
Eurusd@1.2720

Lady luck had just visited me. TP at 1.2590. Better than my estimate of 1.2595. Turned long at same level. SL 1.2557.
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