• US stock market daily report (June 29, 2015, Monday)

    In advance of the end of Q2, a breakdown in talks between Greece and its creditors caused a mad dash for cash to fund trades pushed borrowing costs on a key source of overnight loans for Wall Street to rise on Monday. Wall Street remains on edge as traders fear the worst from Greece. Into early afternoon trading Monday, the DOW was down over 220 points.

    The chance that the Greek government will miss its $1.77 billion repayment to the International Monetary Fund on Tuesday appears almost imminent.

    Greece shuttered banks for the week and imposed capital control, sending investors to safety in U.S. Treasury bills and term reverse repurchase agreements from the Federal Reserve.

    Overnight repos interest rate was last quoted as high as 0.20% before easing to as low as 0.15%, putting an end to the five-week low of 0.07% on Friday.
    On March 31, overnight repos were bid up to 0.58%, striking the highest level since November 2008, during the global credit crisis. One-month repo rates were quoted from 0.25% to 0.29% on Monday, little changed from Friday. Longer-term repo rates were hovering at their highest level seen in more than two-and-a-half years.

    The typical end of the quarter for banks and dealers to fund their balance sheets and money market funds has been complicated by the Greece crisis. Banks, dealers and other investors are conserving cash to meet reporting and regulatory requirements.

    The U.S. central bank awarded $100 billion of two-day reverse purchases at an interest rate of 0.07% to 72 bidders on Monday.

    Some banks and dealers have locked down longer-term financing earlier than usual in the $5 trillion repurchase agreement market, where they pledge Treasuries and other securities as collateral in exchange for cash from investors.

    Contributed by Millennium Traders
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