Funding and Collateral Solutions

Centrally Cleared Repo Market Brief

A quarterly update on the developments in the centrally cleared sponsored repo market

April 2022

Through innovative and flexible cash investment and financing solutions, we provide both our custody and third-party clients access to the Fixed Income Clearing Corporation (FICC) sponsored repo platform.

Given the interconnectivity between repo markets, monetary policy and macroeconomic trends, we want to help you stay up to date on what’s happening in the market with a specific focus on the rapidly growing sponsored segment. With views on recent market trends and what to expect in the future, our quarterly briefs give you the insight you need to unlock the benefits of centrally cleared repo.

DOWNLOAD Q1 BRIEF

Highlights from this quarter:

•  Repo markets welcomed a 25 basis point rate hike at the March FOMC meeting after two years of being pinned near zero.
•  With repo rates moving in line with the hike, overnight repo is seeing inflows as rates have become more attractive than lower yielding T-Bills.
•  Uncertainty around a Fed rate path has investors remaining in the front of the curve and will continue to keep demand in overnight repo.
•  With balance sheet run off poised to start in the second quarter, FICC sponsored repo is likely to be an attractive investment in not only the overnight product, but also term and sponsored GC.