While Euro Libor Gently Weeps

In my mind there’s not much else to say about Libor in the Eurozone.  The charts do all the talking for me:

The curve is shifting out at a rapid pace, in a bear steepening fashion.  Looks like liquidity situation in Europe is getting worse, which keeps the Libor rates moving upward rapidly. And the Euro has followed suit:

This brings up an interesting point about the risk-on/risk-off trade: it depends on who you’re talking about.  For most people in the world, the risk-on trade is to hold anything except dollars.  Risk-off is to convert those holdings into dollars. For European banks, however, they have to convert everything back into Euros.  So with the removal of Euro-denominated liquidity facilities, “risk-off” takes on a different meaning.

Regardless, the funding squeeze continues…

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Filed under finance, government, International, macro, Markets, Monetary, risk management, Way Forward

2 responses to “While Euro Libor Gently Weeps

  1. Pingback: Tweets that mention While Euro Libor Gently Weeps « Deep Thoughts by Professor Pinch -- Topsy.com

  2. Pingback: does anyone know the website where you compare student loan interest rates for private loans? | US INTEREST RATE

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