The Big Number
The daily high-traded price for the overnight repo rate, according to the broker ICAP.  “Repos”, or repurchase agreements, are used to provide short-term funds to financial institutions.

What this means
Investors were concerned that repo rates would spike, potentially more so than they did around the prior year-end, but it didn’t happen.  The Fed has been active in pumping liquidity into the repo market, finally removing repo as a source of worry for investors.

Market Notes
What was expected to be a quiet week was disrupted on Friday by a U.S. strike against Iran in the Middle East, the kind of “exogenous” event about which investors constantly worry.  How this will play out remains to be seen.

The Markets’ Reaction
Global equities ended flat in a disjointed four-day trading week.  Stocks drifted lower in the last trading days of 2019, jumped on Thursday, then fell on Friday on the Iran news.  Emerging Markets led, up 0.5% (MXEF) while the S&P 500 lost -0.1% (SPX) and International Developed Markets were flat (MXEA). U.S. bond rates were lower; oil closed higher.

What to Watch
News from the Middle East has knocked impeachment off the front page, at least for the moment, though the impact of these kinds of events on markets tends to be transitory.  U.S. non-manufacturing Institute of Supply Management (ISM) data is out on Tuesday and the December jobs report is on Friday.

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