What's the funding market telling you?

FTC Community TeamStaff96 views

Funding markets — repo rates, FX swap pricing, cross-currency bases — signal stress before most other markets notice. The signals are technical but the warnings are early.

What's the funding market telling you? — pip movement diagram
How a pip moves the exchange rate

Do you watch them?

  • the funding signals you follow
  • the stress episode they caught early
  • how they reach spot currencies
What's the funding market telling you? — risk-reward diagram
A risk-reward ratio of 1 to 2

Background: bond yields and exchange rates for the adjacent mechanics.

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