Nordea Markets: USD liquidity to turn ampler over

Nordea Markets analysts are expecting USD liquidity to turn ampler over next couple of weeks, with looming debt ceiling deadline.

Key Quotes

“US treasury cash balance stands at 361bn, & we expect to see that figure as low as 200bn around 1st of March.”

“The commercial banking system will be on the receiving end of those 160bn, which could prove a USD negative scenario now that the big SOMA-day on Friday the 15th is behind us.”

“The tightening of Libor/OIS spreads has already started, and we expect more to come.”