At the end of 2018, US repo traders told us that they were no longer worried about liquidity but spreads were a big concern. Calendar year 2019 saw liquidity pitfalls but reasonable spreads, and sometimes terrific spreads. In 2020, the COVID-19 epidemic has seen the exact reverse unfold, with spreads now poor while the Fed provides ample liquidity. Will the Fed pulling back let spreads come back into the US repo market?
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