Euribor Futures Rise to Week High on Bank LTRO Repayments

Euribor futures rose to the highest in a week after the European Central Bank said lenders will repay another 3.5 billion euros ($4.8 billion) of its three-year loans.

The price of the euro interbank offered rate futures contract due December 2013 climbed to 99.49 cents, the highest since Jan. 25, according to data compiled by Bloomberg. The price was 99.48 cents at 12:43 p.m. in London and the implied yield, which moves inversely to the price, fell to 0.53 percent.

The ECB said today that 27 banks will use the second opportunity to repay its emergency three-year loans. Financial firms already returned 137.2 billion euros of funds from the first Longer Term Refinancing Operation this week.

“The repayment number was below market expectations this week, as many had thought that banks taking a ‘wait and see’ approach would have been emboldened to repay by high participation in the first window,” Michael Symonds, a credit analyst at Daiwa Capital Markets in London, wrote in a note to clients.

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