Earnings, Commerse and Money - Business news

Money markets us 4 week bill sale holds rate within recent range

* Rates at U.S. 4-week bill sales rangebound since January * Repo rates edge higher * Three-month Euribor rates at all-time low By Chris Reese NEW YORK, July 10 Solid demand for short-term U.S. debt meant the U.S. Treasury Department's sale of $30 billion of four-week bills on Tuesday was completed at a rate within a range that has held for several months. The Treasury sold the bills at a high rate of 0.07 percent, down from a high rate of 0.075 percent in a similar sale of the bills last week but up from a high rate of 0.06 percent two weeks ago. About 83 percent of the bids in Tuesday's sale were awarded at the high rate. Four-week bills in weekly sales have brought a high rate of 0.04 percent to 0.11 percent since Jan. 31. Demand for short-term U.S. debt has remained solid even as the Federal Reserve sells its short-term debt holdings as part of its latest stimulus effort, dubbed "Operation Twist." The central bank is selling its shorter-dated U.S. debt holdings and buying longer-dated debt in an effort to lower longer-term borrowing costs like those on mortgages. As part of Twist, the Fed on Tuesday bought $1.322 billion of Treasury inflation-protected securities maturing January 2022 through February 2042. Some analysts expect the dynamics of Operation Twist will mean U.S. primary dealers will continue to hold large quantities of short-term debt, which could mean support for overnight repo rates in general. "We think the structural trend related to Operation Twist sales remains in place and that dealer positions in front-end paper will remain very high going forward," said Michael Cloherty, head of U.S. rates strategy with RBC Capital Markets in New York, adding "accordingly, we do not look for repo rates to drop." The overnight rate on repos secured by U.S. government debt was last quoted on Tuesday at 0.24 percent, up from 0.23 percent late Monday, according to Reuters data. Meanwhile, the European Central Bank's cut of its mainstream deposit rate to zero last week continued to push European market rates to fresh all-time lows on Tuesday. The ECB's overnight deposit rate acts as a floor for money market rates as banks only lend to rival banks if they are able to earn a better rate of interest than at the ECB. Three-month Euribor rates, traditionally the main gauge of bank-to-bank lending, on Tuesday hit a new all-time low of 0.521 percent, down from 0.531 percent, while overnight rates which do not yet factor in the cut -- it comes into force on Wednesday -- inched down to 0.325 percent from 0.329 percent. Three-month dollar Libor rates were unchanged at 0.4576 percent on Tuesday, while three-month sterling rates fixed at 0.85963 percent versus 0.86463 percent on Monday. Both Libor and Euribor rates are currently at the center of a manipulation scandal after it emerged a number of banks were falsely submitting the rates they pay to the committee that aggregates the data.

Money markets us repo rates fall as new quarter starts

(Updates repo market action)NEW YORK Oct 1 A key borrowing cost for Wall Street dealers fell from three-month highs on Thursday as cash investors resumed lending at the start of the fourth quarter. The overnight rate on repurchase agreements was last quoted at 0.15 percent to 0.20 percent, down from 0.40 percent late on Wednesday, ICAP data showed. Towards the end of prior quarter, money market funds and other investors reduced their repo holdings in favor of near risk-free Treasury bills and reverse repurchase agreements offered by the Fed. In the $5 trillion repo market, Wall Street dealers borrow from money funds and other investors with Treasuries and other securities as collateral to fund their trades.

The elevated repo rates enticed investors and reduced their demand for Fed's reverse repos on Thursday. The U.S. central bank awarded $75.14 billion in overnight RRPs, down from $199.61 billion on Wednesday. Interest rates on U.S. Treasury bills that mature between now and year-end stayed in negative territory on Thursday as a measure that extends funding for federal agencies to Dec. 11 led the government to increase the amount of T-bills it will sell next week.

The Treasury Department had cut the sizes of its T-bill offerings in anticipation of the government hitting its statutory borrowing limit later this year. In addition to falling supply, safehaven demand due to recent market turmoil had pushed T-bill rates into record negative levels in September.

On Monday, the Treasury will sell $21 billion in three-month bills and $21 billion in six-month bills . Earlier this week, it sold $18 billion in three-month T-bills and $18 billion in six-month bills. The supply increase was not large enough to pressure T-bill rates back into positive territory, analysts said. T-bill rates on issues that come due next Thursday through Dec. 31 were last quoted at -0.010 percent to -0.025 percent, according to Tradeweb.

More erste clients exit swiss franc loans

VIENNA Aug 17 Around a quarter of Austrian lender Erste Group Bank's customers with Swiss franc-denominated loans have now switched to euro financing or to loans that amortise rather than come due upon maturity, its the Vienna-based lender said on Friday. The Swiss franc's strength amid the euro zone debt crisis has made it more expensive to service such loans, prompting banks to suggest customers swap out into more conventional domestic financing to avoid currency risk. Erste said a campaign it has run since last autumn had persuaded more than 2,500 customers to switch out of foreign currency mortgages worth around 400 million euros ($495 million).

Another 1,500 foreign currency borrowers had converted loans repayable upon maturity into amortisation loans worth around 270 million euros, it said.

Nearly one in every four private loans in Austria are denominated in foreign currency, with just over 34 billion euros outstanding in Swiss franc loans held by private individuals, it said. Many borrowed in francs to tap low interest rates for mortgages.

At Erste Bank around 14,000 private individuals still have 2 billion euros worth of foreign currency loans. The average loan was around 150,000 euros.

Press digest sunday british business july 27

LONDON, July 27 British newspapers reported the following business stories on Sunday. Reuters has not independently verified these media reports and does not vouch for their accuracy. SUNDAY TELEGRAPH HESTER TO ANNOUNCE MAJOR RSA WRITE-DOWNS Stephen Hester, the new chief executive of RSA Group , is believed to be planning hundreds of millions of pounds of write-downs as the next step on the road to recovery of the troubled insurance giant. He is planning to revalue intangible assets such as intellectual property in a number of parts of the business at the insurer's half-year results next month. Although he would not comment on the size of the write-downs, he told The Sunday Telegraph in an interview that he believes it is right for a new management team to rebase a business on arrival. RETAIL VETERANS ON SHORTLIST TO BECOME NEW MORRISONS CHAIRMANRetail grandees Archie Norman and Allan Leighton, who led a turnaround at Asda in the Nineties, are in the frame to become the new chairman of struggling supermarket chain Wm Morrison . Two other names being considered are John Gildersleeve, who was a director at Tesco for 20 years and is chairman of British Land, and John McAdam, chairman of Rentokil Initial, and the senior independent director at J Sainsbury. HALF OF BRITAIN TO BE OPENED UP FOR FRACKINGMinisters are this week expected to offer up vast swathes of Britain for fracking in an attempt to lure energy companies to explore shale oil and gas reserves. The Department for Energy and Climate Change is expected to launch the so-called "14th onshore licensing round", which will invite companies to bid for the rights to explore in as-yet untouched parts of the country. LUTON AIRPORT OWNER POISED FOR EUROPE'S BIGGEST FLOAT AT 7 BLN STGThe company that owns Luton Airport is preparing for a bumper 7 billion pounds float that would be Europe's biggest this year.

Aena Aeropuertos, the Spanish state-backed airports operator, has appointed a roster of heavyweight investment banks to oversee a privatisation, scheduled for the autumn. SHAKE-UP AT MALAYSIA AIRLINESMalaysia Airlines is likely to change its name as part of a radical overhaul in the wake of the death of 298 passengers in a missile attack on a flight over Ukraine. The Malaysian flag carrier, majority-owned by the government, will also seek new investors to rebuild its business after two major tragedies within six months. Malaysia Airlines is also calling for a single global body to monitor threats and decide where civilian aircraft are allowed to fly.

SUNDAY TIMES TCHENGUIZ TO SUE GRANT THORNTON AFTER SFO CLIMBDOWN The property tycoon Vincent Tchenguiz is to sue accountants Grant Thornton for several hundred million pounds over a bungled Serious Fraud Office investigation. MONARCH AIRLINES SEEKS NEW BACKERSThe billionaire Mantegazza family behind Monarch Airlines is preparing to sell a stake as part of plans to reinvigorate the budget carrier to take on rivals easyJet and Ryanair . AUSTRALIANS SEEK BUYER FOR 50 PCT STAKE IN BRISTOL AIRPORTA stake in Bristol airport is on the block after Australian bank Macquarie started sounding out buyers for its 50 percent share.

MAIL ON SUNDAY HOME RETAIL MAY SPIN OFF HOMEBASE CHAIN Home Retail Group is considering a plan to spin off its 1.5 billion pounds DIY chain Homebase so it can concentrate on developing its more prosperous Argos chain. The most likely exit for the Homebase business is for it to go to a private equity firm rather than spinning it off on the stock market. FINANCIAL TIMES TOP UK CHAIRMEN BACK EU RENEGOTIATION A group of FTSE 100 chairmen surveyed for a poll have overwhelmingly backed renegotiation of Britain's relationship with the EU, with many calling for economic and social power to be returned to nation states. The survey, which covered one in three chairmen of the UK's biggest companies, shows that disenchantment with the EU status quo stretches right to the top of corporate Britain, although support for withdrawal from the bloc remains minimal.