Money Market

Money market fund outflows from Credit Suisse were only moderate in May following its guilty plea to helping US clients evade tax, Fitch Ratings says.

European corporate treasurers are concerned by decreasing bank credit quality, global banking and European money market fund (MMF) regulation, according to a live survey of 90 delegates at Fitch Ratings’ third annual cash management conference in London last week.

The rise in the yield of the 10-year TNote has been impressive since the start of May, up from 1.60% to 2.90%, its highest level since July 2011 (TNote contract has shed around 6%). The steepening of the US sovereign yield curve has been just as impressive, as the 10-2Y spread has widened to 250bp from around 140bp at the start of May.

The ECB announced its second long-term refinancing operation (LTRO) on Wednesday. The auction led to 800 banks tapping the ECB for EUR 530bn in three year funding at 1%.

The ECB has adopted a historic longer term refinancing measure to support bank lending and money market activity. It also decided to lower the threshold rating for certain securities as collateral ...