The tide is turning on USD excess liquidity again. For a string of technical reasons, USD liquidity actually increased on a yearly basis throughout the latter part of 2017 and into early 2018. Signs of stress related to less USD liquidity in the financial system are already visible in e.g. LIBOR-OIS spreads, which have widened to levels not seen since 2012. A wider LIBOR-OIS spread is a sign of less excess liquidity in USDs to come. The jury is still out on whether the increasing pace of the liquidity shrinkage in Feds quantitative tightening schedule, will have important bearing on also the USD and the ... (full story)