E-o-n-i-a
(To be sang a la Patti Smith)
Look here, it’s eonia back to record lows:
And look here, some randomish thoughts, in no particular order, on what might be causing it:
- There’s a higher probability of an ECB rate cut priced in — see negative rate (bluffs) for more.
- The mix of banks participating in eonia has ‘improved’ again. Although it seems unlikely it ever got particularly good.
- Everyone now thinks excess liquidity will be hanging out well above critical levels. JP Morgan, for example now see it reaching around €250bn by end-2013 from around €500bn. MRO access ticking up may have something to do with that.
- Moves at this level are basically just noise anyway and should be broadly ignored.
- Something else.
(David)
