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EU inter-bank rates fall to record lows

Published on Jun 10, 2014 5:06 PM

LONDON (Reuters) - Euro zone overnight interbank interest rates fell to their lowest levels on record on Tuesday, while a sharp rally in government bonds started to ease for some countries.

Strategists said money markets were continuing to adjust to last week's cut in the European Central Bank's main interest rates and its promise of fresh liquidity for banks, which should help short-term rates stable.

"The ECB has given very strong forward guidance for the first two years, and all its measures work to pin front-end rates," said Michael Michaelides, rates strategist at RBS.

Spot Eonia fixed at 0.053 percent after markets closed on Monday, dropping below the previous historic low set in February 2013.

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