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Apparently no worries in this Tuesday 22 Feb report, with a contribution from an analyst we've see upthread:

MONEY MARKETS-LIQUIDITY PICTURE INCOMPLETE | Reuters

Banks opted to reduce their borrowing from the ECB at the central bank's seven-day tender, draining 17.5 billion euros. But markets awaited the results of tomorrow's three-month loan offering before changing their outlook on liquidity conditions.

The overnight interbank rate EONIA= -- which typically rises as excess liquidity dwindles -- was expected to continue its downward trend during the current maintenance period.

"Even if (ECB borrowing) would have fallen further I think the liquidity situation is abundant," said Commerzbank rate strategist Christoph Rieger. "Given that tomorrow we will have another 3-month LTRO with only 38 billion expiring ... I don't think overnight rates will increase on the back of these results.

Longer-term ECB loans worth 38 billion euros are due to expire this week, while banks have the opportunity to borrow as much as they need at a three-month tender on Wednesday.

Analysts said that with recent money market conditions proving volatile, the ability to lock in funding for longer duration at a stable rate had become more attractive and increased demand should see liquidity pumped back in to the system.

"tomorrow's three-month loan offering", which was yesterday, was fully taken up at €119.5bn.

"expected to continue its downward trend" - in fact EONIA went up again, from 0.497% on the 21st, to 0.531% on the 22nd, to 0.661% yesterday. Though that may only be an uptick.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 24th, 2011 at 10:10:49 AM EST
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