FRANKFURT, July 14 | Thu Jul 14, 2011 5:48am EDT
(Reuters) – Key euro-priced bank-to-bank lending rates continued their upward trajectory on Thursday, while euro zone debt crisis jitters pushed longer-dated rates in the opposite direction.
The three-month Euribor rate — traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks’ appetite for lending — rose to 1.606 percent from 1.605 percent on Wednesday.
Shorter-term one-week Euribor rates remained at 1.462 percent. EONIA overnight interest rates jumped to 1.476 percent from 1.016 percent as money markets followed the readjustment pattern typically seen at the start of a new ECB reserves period.
Longer-term rates showed signs that intensifying euro zone debt crisis tensions may be causing markets to scale back ECB rate hike expectations.
Six-month Euribor rates inched down to 1.817 percent from 1.818 percent while longer-term 12-month rates fell back to 2.176 percent from 2.177 percent.
In contrast to recent polls showing economists see at least one additional rate hike this year, Euribor futures <0#FEI:> showed markets were largely pricing out further rate rises.
Excess money market liquidity is just under 45 billion euros at present according to Reuters calculations , having settled at around 15 billion at the end of the ECB’s last reserves period.
With the euro zone debt crisis continuing to roil the bloc, the central bank continues to offer limit-free funding to banks, a promise that currently runs to mid-October. .
While it is back to its pre-crisis range of funding operations, the euro zone debt troubles are preventing it from further normalisation. Last week, it also relaxed its rules on the use of Portuguese government bonds in its refinancing operations.
Three-month loans are again the longest maturity on offer and banks have now paid back all the six-month and 12-month loans the ECB injected at the height of the turmoil.
Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 0900 GMT.
* For a table of the latest Euribor fixings for terms of one week to one year, double click on
* For a table of the previous day’s fixings of EONIA swap rates, which show market expectations for future overnight lending rates, double click on
* For graphs of historic Euribor and EONIA swap rates, right click on the links in angle brackets below, and select ‘Related Graph’ 1 week 2 week 3 week 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 1 year (Reporting by Frankfurt newsroom; Editing by Toby Chopra)
Jacqueline Tongko 