US GOVTS:FUNDING-New York Fed OMO increased; Confusion abounds

This can’t be a good thing for market Confidence

From IFR news “According to news reports, tomorrow’s Overnight operation may now be $100 bn and the 14-day term operation will be doubled to $60 bn.

*This change was welcomed in the collateral market as GC is now trading 1.85% bid.

*However, it seems that confusion abounds due to language used in the stated schedule provided by the New York Fed where the operations were said to be at least $75 bn and at least $30 bn. *That language led many players to believe that the current operations would satisfy any oversubscription in bidding. This morning’s operation had $91.95 bn but the New York Fed only accepted $75 bn. “

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