US TSYS/OVERNIGHT REPO: ON RRP Takeup At 4+ Year Lows As Treasury Cash Rebuilds
Takeup of the New York Fed's overnight reverse repo facility fell by $28.4B Thursday to $28.8B, the lowest since April 2021. Similarly, the number of counterparties fell to a post-2021 low of just 14.
- Aside from the usual month-end pickup, takeup has been falling in pronounced fashion as Treasury has begun ramping up bill sales to rebuild the Treasury General Account after the lifting of the debt limit in the first week of July.
- At current levels, ON RRP is basically negligible compared with a peak of over $2.5T at the end of 2022.
- We will be interested to see the Fed's weekly balance sheet release later today for the current level of system reserves versus ON RRP and TGA. So far reserves have remained relatively unchanged despite a sharp rise in the TGA, with ON RRP instead falling.
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US: FED Reverse Repo Operation
RRP usage retreats to $198.277B this afternoon from $217.841B yesterday, total number of counterparties at 36. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021 - compares to yesterday's (July 1) $460.731B highest usage since December 31.
GBPUSD TECHS: Trades Through Trendline Support
- RES 4: 1.3835 High Oct 20 2021
- RES 3: 1.3800 Round number resistance
- RES 2: 1.3681/3789 High Jul 04 / 01 and the bull trigger
- RES 1: 1.3572 20-day EMA
- PRICE: 1.3391 @ 16:32 BST Jul 15
- SUP 1: 1.3375 Low Jul 14
- SUP 2: 1.3371 Low Jun 23 and a key short-term support
- SUP 3: 1.3335 Low May 20
- SUP 4: 1.3245 Low May 19
A softer short-term tone in GBPUSD remains in place and this week’s move down marks an extension of the current corrective bear leg. The pair has breached both 20- and 50-day EMAs, exposing trendline support at 1.3430. The trendline - drawn from the Jan 13 low - has been pierced, a clear break of it would strengthen a bearish threat and expose 1.3371 initially, the Jun 23 low. Initial firm resistance to watch is 1.3681, the Jul 4 high.
MNI EXCLUSIVE: A Look At Fed System Reform Under A Possible Warsh Fed
MNI reports on Fed system reform under possible Warsh Fed -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
