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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Peter Singleton who wrote (1451)	4/2/1999 8:34:00 AM
From: Henry Volquardsen	Read Replies (3) \| Respond to of 3536

Peter, quarter end pressures. There will be a lot of balance sheet adjustments at year ends and quarter ends. Many banks what to keep their assets as low as possible going over quarter ends to make their return on asset and capital ratio numbers look better. This results in a shortage of money for interbank lending and interbank rates will rise temporarily. March 31 shows some particular tightness as well because it is Japanese fiscal year end. This year you have the added factor of Easter holiday immediately after the turn as well. The market is well aware of these quarter end and year end factors and in fact trades it in advance. As an example overnight money for the last day of this year is trading in the mid 10% range while the day before and the day after are both trading in the 5s. The Fed activity hasn't been particularly noteworthy. They are always making adjustments in either direction. Late March and early April are also periods when there is generally a seasonal bias towards an add need. It is largely related to tax payments.