The asset-backed commercial paper market saw an apparent spike in volume during the first two days of July. According to figures posted by the Federal Reserve, month-end outstandings in June came in at just below $720 billion, though the Fed reports outstanding ABCP at $734.7 billion for Wednesday July 2, implying a near $15 billion increase in just two days.
Whether or not this is reflective of an actual surge in issuance is unclear, as the last time numbers showed a significant and unexplained jump, the Fed subsequently footnoted the increase as a reporting anomaly (
Two ABCP sources said the increase is possible, as the market has shown volume movement of that magnitude in the past. However, neither source — one being an ABCP trader — had actually witnessed the activity that would explain the increase.
As for the $720 billion month-end figure, ABCP volume declined roughly $17 billion from the close of May, while the overall CP market dropped nearly $57 billion.
During the same two-day period, overall CP increased $11.8 billion.
More to come...
