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2 Oct 2013
Flash: Short term USD seen to be expensive on uncertainty – Societe Generale
FXstreet.com (London) - Sebastien Galy explained that ahead of the 17th of October short term USD is likely to become more expensive given the uncertainty.
Key Quotes:
"US money markets will then switch presumably to corporate credit for short dated investments and we should see a mild funding squeeze. In the last major episode it didn't."
“Foreign reserves managers are stuck with short dated durations but can't buy enough corporate exposure. The balance sheet of the BIS and world bank must be chocking under short dated deposits. Can you run away from the USD, presumably if you can buy the equivalent of a few countries quickly. As most privileges it is thoroughly abused”.
“Asset managers will simply extend a bit duration and presumably take some steepeners on the back end of the UST curve (see our rates colleagues). JPY may be an appealing global hedge”.
Key Quotes:
"US money markets will then switch presumably to corporate credit for short dated investments and we should see a mild funding squeeze. In the last major episode it didn't."
“Foreign reserves managers are stuck with short dated durations but can't buy enough corporate exposure. The balance sheet of the BIS and world bank must be chocking under short dated deposits. Can you run away from the USD, presumably if you can buy the equivalent of a few countries quickly. As most privileges it is thoroughly abused”.
“Asset managers will simply extend a bit duration and presumably take some steepeners on the back end of the UST curve (see our rates colleagues). JPY may be an appealing global hedge”.