Halister News

(Bloomberg) -- Banks face “sizable maturities” from late-Aug. through early-Sept., which should pressure funding rates higher, JPMorgan strategists led by Alex Roever said in note.

• Maturities “ramp up” again in early Oct., which may help lift rates again
  • NOTE: USD 3-mo. Libor set at 0.8254%, highest since May 2009; 1-mo. Libor 0.5222%, highest since March 2009
• Japanese banks face heaviest period of maturities next 2-3 wks; French banks have a “glut” of maturities in Sept., which may become a pressure point; Canadian banks have “relatively large maturities” in early Oct.
• Funding pressures are beginning to spread to the 1-mo. sector as banks, especially Japanese and French banks, are “willing to forgo” economics at the moment by continuing to issue in 1-mo. maturity bucket
  • Possible they may not be as “LCR constrained as other banks,” may hope to “temporarily ride this out” until Oct. 14
• Banks issuing more 1-7-day maturities, which comprise ~80% of all volume traded
  • NOTE: Of total $12.681t of AA financial paper, $11.918t have 1-9 days until maturity, Federal Reserve data show