Running short on the dollar?
The EUR/USD 3-month cross currency basis just blew up to its widest spread since 2011 - now at 110 bps - while the yen-dollar 3-month basis also widened from 80 bps to start the morning to nearly 120 bps currently.
And all of this is coming despite the fact that central banks are relaunching swap lines to try and ease funding pressures in the market.
Could this be the reason why we're seeing stocks fall back today as investors are fearing a possible funding squeeze? In turn, this is also perhaps the reason why the dollar is outperforming so heavily this morning across the board too.
