Chart: TED Spread and LIBOR-OIS

June 18, 2018

Here's a timely update on a couple of short-term funding pressure gauges - I noticed the movement in these indicators as I was updating the latest "Global Cross Asset Market Monitor".  In short, these are both measures of funding pressures in the financial markets, and are seen as leading indicators of financial stress.  After sharply rising earlier this year, both measures have peaked, but that may not be the end and that may not necessarily be a bad thing as such.  A big driver of the increase has been policy: the Fed is running down its balance sheet and hiking rates, the US government has changed tax treatment for multinationals, and the treasury has been more active in the short term funding markets.  The Fed tightening reflects a strong economy, and the fact that these are all basically policy/government driven means its not necessarily a credit crunch or signs of worsening credit quality or funding stress.  Yet these factors are unlikely to go away in the near term, so as I mentioned, it's a peak, but perhaps not the top.

 

 

 

Follow us on:

LinkedIn https://www.linkedin.com/company/topdown-charts

Twitter http://www.twitter.com/topdowncharts

Please reload

Follow us for updates:
  • Twitter Social Icon
  • LinkedIn Social Icon
Subscribe:

Subscribe to the Top 5 Charts of the Week so you can get:

--Exclusive Charts

--Actionable Insights

--A Flow of New Ideas

Search By Tags
Archive
Please reload

Important Notice

We offer exclusive insights for institutional clients with our suite of multi-asset investment research reports, personalized service, & global perspective.

Take a trial today...

Become a Client

 

 

 

 

Important Information for Visitors

Privacy Policy    Disclaimer   Contact Us

Home

© Copyright 2016 Topdown Charts Limited