The 3-month Libor rate dipped at today's fixing
The 3-month Libor rate dipped at today's fixing, falling to 2.3370% from Friday's 2.33746%. That breaks the string of 41 straight gains since February 6. Some of the main factors for the slip are likely the reductions in bill auction sizes and subsequent pay downs, as well as easing in Fed rate hike expectations amid worries over the potential slowing effects on trade, and growth, from a trade war. Along with the slip in Libor, the Libor-OIS rate narrowed to 59.2 bps from last week's 59.6 bps. However, this decline in Libor and the narrowing in the spread to OIS is not likely to become a trend and analysts expect choppier trading later in the month. The reduction in bill volumes is a function of the hefty climb in tax receipts around the April 16 deadline, and analysts expect the bills to be increased again in May. Fed tightening fears are also likely to build again if economic data show better than expected growth and rising inflationary pressures. Meanwhile, SOFR was unchanged at 1.75% on Friday.