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Money markets us repo rates tick lower, but near recent highs


* Benchmark euro interbank rates hit record lows ADVISORY - Reuters plans to discontinue its daily report on the money markets in New York as of Oct. 15. Instead, we will include coverage of U.S. money markets in our daily reports on U.S. Treasury bonds. Significant developments in money markets will be reported separately by Reuters. For any comments, please write to: william.this site NEW YORK, Oct 3 U.S. overnight lending rates dipped on Wednesday, but remained near recent highs as investors looked ahead to key U.S. payrolls data due on Friday for direction as to the strength of the economic recovery. The interest rate on overnight repurchase agreements was last quoted at 0.32 percent, down from 0.35 percent late Tuesday. Repo rates have generally been rising since touching a low of 0.03 percent in July, 2011. The median of forecasts from analysts polled by Reuters is for the government on Friday to announce U.S. employers added 113,000 new jobs in September, up from 96,000 new jobs in August. The unemployment rate is expected to have edged higher to 8.2 percent last month from 8.1 percent in August. Meanwhile, key Euribor and Libor bank-to-bank rates hit fresh record lows on Wednesday, as the huge volume of cash pumped into the banking system by the European Central Bank and the prospect of further cuts in its interest rates extended a year-long slide. The three-month Euribor rate, traditionally the main gauge of unsecured bank-to-bank lending, fell to 0.218 percent from 0.220 percent. The equivalent Libor rate, settled in London at a record low of 0.14643 percent, versus Tuesday's 0.14857 percent. Shorter term one-week rates ticked down to 0.082 percent after overnight Eonia rates also hit a record low of 0.087 percent. Bank-to-bank lending rates have been in virtual free-fall since November last year when news broke that the ECB was going to flood the banking system with ultra-cheap, three-year cash. The bank's decision in July to stop paying interest on overnight deposits has allowed the slide to continue by removing the natural 0.25 percent floor for the money market. In contrast to euro rates, dollar-priced bank-to-bank Euribor lending rates inched higher, with three-month rates up to 0.63769 percent from Tuesday's 0.63692 percent and overnight dollar rates edging up to 0.31846 percent from 0.31769 percent. Three-month dollar Libor rates fixed at 0.35250 percent, down from 0.35400 percent on Tuesday. The amount of excess cash in the euro zone banking system remains extremely high at 726 billion euros, according to Reuters calculations. With liquidity set to remain high for the foreseeable future money market experts are instead focused on whether the ECB could copy Denmark's example and start charging banks to deposit cash overnight with it. It is an idea that has been floated by a number of ECB policymakers but it would be a complicated move and add extra complexity to an already dysfunctional money market. Euribor rates are fixed daily by the Banking Federation of the European Union

Patience an asset for us businesses seeking opportunities in cuba


Red tape and slow approvals from Washington and Havana make it hard for U.S. companies to do business in Cuba despite a detente between the U.S. and Cuban governments, according to American executives in Havana for an annual trade fair this week. Many vowed to keep trying, though, as reconciliation between the former Cold War foes slowly opens the door to a new market. In the build-up to the fair, representatives from 25 U.S. companies spoke about opportunities on the Communist-ruled island as they gathered at the former U.S. Businessmen’s Club in Old Havana. It was a symbolic location, in a building taken over by Fidel Castro's revolutionary government after the overthrow of a U.S.-backed dictatorship in 1959. A U.S. hotel, cruise ships and commercial flights have appeared in Cuba for the first time in more than 50 years, since U.S. President Barack Obama and his Cuban counterpart, Raul Castro, announced in 2014 that they would work toward normalizing relations. But while Obama has loosened the U.S. trade embargo on Cuba, the Republican-controlled U.S. Congress has not heeded his calls to end it. Together with Cuba’s bureaucracy and ongoing allergy to capitalism, that means serious opportunities on the large island close to Florida remain a struggle for most U.S. companies.

"We are seeking a blanket license from the U.S. Treasury Department for all our products. We have been waiting a while already, something like 10 months," said Hector Rodriguez, sales manager at Puerto Rico company Rimco, the official dealer for Caterpillar's (CAT. N) Cuba business and one of the trade fair's exhibitors. Progress has been made in areas such as civil aviation and telecommunications, but not others such as infrastructure, energy and health, said Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, which represents many at the fair and hosted the meeting at the old downtown business club.

"There has been significant, historic progress on the political front while on the commercial, only incremental progress," said Brilliant, whose group represents corporations eying or already in Cuba, including American Airlines (AAL. O), Dow Chemical Co (DOW. N), Fifth Street Asset Management (FSAM. O) First Data Corp (FDC. N) and General Electric Co (GE. N)."Cuba has not been a country that has encouraged foreign investment, profitability, entrepreneurship and innovation, and these remain sensitive cultural issues," Brilliant said, voicing frustration that more deals had not been signed and admiration that so many of his members took a long view and remained interested in Cuba. Hundreds of U.S. companies and their legal counsels have met Cuban officials over the last year to discuss trade and investment, often accompanying local, state and national politicians. Some companies have lost interest, but many remain in contact with Cuban officials.

"You are trying to undo 55 years of enmity and that requires patience," said Pedro Freyre, chair of international practice at Akerman LLP, and who travels frequently to Havana, adding that some clients became frustrated, but most understood. "That you can use your cell phone in Cuba, that you can catch a flight out of New York or Ft. Lauderdale, that Cuban programmers are doing work for U.S. companies, that a cruise ship regularly docks here, that is remarkable,” he said.

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