Special Coverage

Central Banks money injection

Tue, Mar 11 2008, 14:53 GMT
by Marina Schiaffino

FXstreet.com


Injection of moneyFollowing last years' movement, the Fed has announced that it will inject $200B of Treasury securities under a new Term Securities Lending Facility (TSLF), by expanding its securities lending programme.

The Fed will also increase the swap lines with the ECB and SNB. On one hand, the ECB agreement will increase to up to $30B and on the other hand, rised the Swiss accord to $6B.

In-Depth Analysis

Related News

Analysts' Comments

  • · Andrew Brenner, senior vice president at MF Global:
    "The Fed action is significant, well telegraphed and seems to be working. Treasuries are down one point, 2-years have gotten crushed and the 2/10 (curve) has flattened by 8 to 182. Agency spreads are in and mortgages tightening. With $200 billion announced last week this is another $200 billion. With $400 billion in liquidity we are now talking some real coin. We expect stocks to trade higher. Both Fannie and Freddie are already up in pre-market trading. Dollar has improved." - Reuters
  • · Marc Chandler, chief global currency strategist at Brown Brothers Harriman:
    "The news has seen the dollar jump, equities rally and bonds sell-off. Despite reports that the Fed was soon to announce new measures, the market was caught leaning the wrong way. In the bigger picture, is unclear whether this will prove sufficient, but it does demonstrate the Fed's resolve. Although the swap lines and separate announcements by other central banks will cast an air of coordination around today's announcement, the fact is that the ECB and SNB have plenty of dollars to use of their own if they wanted to, which was the point made in Dec by at least one Fed official. Thus it is still a US-led operation." - Reuters
  • · Tom Bentz, analyst at BNP Paribas Commodity Futures Inc:
    "Oil is definitely reacting to the reversal of the dollar, on coordinated central bank liquidity action." - Reuters

Published on  Wed, Mar 12 2008, 15:55 GMT

Archive

FXstreet.com  | Portaferrissa 7, 1r 2a, Barcelona 08002, Catalonia - Spain
http://www.fxstreet.com | forex@fxstreet.com


Interested in forex trading? forex brokerage firms!


GFT
Contact the broker/FDM
Open a demo account
FOREX.com
Contact the broker/FDM
Open a demo account
Easy-Forex™ Trading Platform
Contact the broker/FDM		Alpari (UK) Limited
Contact the broker/FDM
Open a demo account		Alpari (US), LLC
Contact the broker/FDM
Open a demo account

FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)

[Read Premium full description]


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

©2008 "FXstreet.com. The Forex Market" All Rights Reserved.