14 Oct 2013
Flash: Most expect default will be avoided – BBH
FXstreet.com (London) - Research teams at BBH said, because of the stakes involved, most investors expect that a default will be avoided, even if at the last minute.
Key Quotes:
“And that last minute does not appear carved in stone”.
“Many observers have emphasized the October 17 time frame as date certain, but in reality, is likely some time after that. Moreover, the power of the executive branch should not be under-estimated to find the means to prevent missing a T-bill or coupon payment”.
“The underlying sense that what is happening in Washington is theater and that some resolution is likely. This may help prevent a sharper market reaction. At the same time, there are a number of reports suggesting several institutional investors are avoiding the short-term bills”.
“The plumbing of the international financial system relies to some extent on the use of T-bills for collateral for trading and repos. Despite the ink spilled about the decline of the US, and what some have dubbed the G-zero world, the US dollar and the Treasury market remain the essential feature”.
Key Quotes:
“And that last minute does not appear carved in stone”.
“Many observers have emphasized the October 17 time frame as date certain, but in reality, is likely some time after that. Moreover, the power of the executive branch should not be under-estimated to find the means to prevent missing a T-bill or coupon payment”.
“The underlying sense that what is happening in Washington is theater and that some resolution is likely. This may help prevent a sharper market reaction. At the same time, there are a number of reports suggesting several institutional investors are avoiding the short-term bills”.
“The plumbing of the international financial system relies to some extent on the use of T-bills for collateral for trading and repos. Despite the ink spilled about the decline of the US, and what some have dubbed the G-zero world, the US dollar and the Treasury market remain the essential feature”.