SSA euro CP outstandings tank as S&P warns money markets

By Craig McGlashan, Kathleen Gallagher
26 Jun 2014

SSAs in the European Union have slashed their outstanding volumes of commercial paper and certificates of deposit in euros by over 15% since the European Central Bank cut its deposit rate by 10bp to minus 0.1% on June 5. The figures come as Standard & Poor’s warned that the rate cut could cause investors to pull out of money market funds — one of the ECP market’s most important investor bases.

S&P predicted on Monday that some investors are likely to withdraw cash from euro denominated money funds in search of better returns elsewhere — potentially reducing demand for short term euro debt.

“It is only a matter of time before euro denominated money market funds feel the impact,” ...

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