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Global Rates: What drives European cross currency basis?

At Any Rate

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Analyzing Euro-US Dollar Basis Dynamics and Influencing Factors

This chapter explores the intricate mechanics of the euro-US dollar basis, emphasizing the effects of short-term cross-border flows and recent Yankee bond issuances. It also examines the balance sheet changes between the Federal Reserve and the European Central Bank, concluding with expectations for a modest narrowing of the basis curve.

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