Money markets us money markets quiet before weekend

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(Adds U.S. money markets) * Money markets focus on next week's U.S. payrolls report * General collateral repo rate could firm Monday * Euribor rates fall under weight of ECB cash By Ellen Freilich NEW YORK, April 27 U.S. money markets were quiet on the last trading session of the week, having digested the Federal Reserve's policy statement on Wednesday and now positioning for the influential U.S. payrolls report due next Friday. "The markets are deadly quiet," said Ken Silliman, managing director at TD Securities (USA) LLC in New York. "The FOMC (Federal Open Market Committee) meeting was the big event of the week that the market was preparing for, and after that there hasn't been much to discuss so the market has been positioning for non-farm payrolls," he said. The U.S. Labor Department will release its April employment report on May 4. Silliman cited some buying interest in nine- to 12-month agencies "which offer a slightly more attractive yield for some market investors at this point. "And we've also seen some foreign central bank buying of very short-dated Treasury bills," he added. But volatility "in the money market world has been surprisingly absent." Barclays Capital market analyst Joseph Abate said there had been no impact from Standard & Poor's downgrade of Spain's debt on Thursday, its second downgrade of Spain this year. Instruments maturing in two years or less time are "just not moving," Silliman said. "All the action is farther out on the curve: five years through 30 years." General collateral repo rates that were elevated earlier in the week due to principal and interest payments made on April 25 by Fannie Mae had stabilized around 14 basis points, he said. Settlement of Treasury supply on Monday and month-end positioning could push repo rates higher early next week, "but by the middle of next week, we expect general collateral rates to start trending lower again," Silliman said. Key euro zone bank-to-bank lending rates sank to 22-month lows on Friday amid the ample cash the European Central Bank has provided to the financial system since late last year. The ECB, which left official euro zone interest rates at 1.0 percent earlier this month, has put more than 1 trillion euros of low cost, three-year funding into the banking system since the end of December, cutting interbank rates to half of what they were last August. Three-month Euribor rates, traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, fell to their lowest level since June 2010. The 0.25 percent the ECB offers banks for overnight deposits continues to act as a floor for money market rates. With the ECB expected to keep limit-free liquidity available and interest rates at their record low for the foreseeable future, further falls in Euribor rates are expected. High excess liquidity in the banking system has led to high use of the ECB's overnight deposit facility. Banks parked 791 billion euros there on Thursday. In normal times the amounts are minimal.