great primer. i'm learning as much as i can in all FX and rates related topics. other arguments i'de be interest in (and love to read about from you) are RePo markets (players, role in carry trades, data tools)
PS. CME tool seems to have stopped working (gives wrong basis values)
One of the clearest explanations of the cross-currency basis I’ve seen.
Especially liked how you tied the basis to deeper structural forces — not just rates and funding, but also herd behavior, regulatory pressure, and macro liquidity shifts.
Mastering this really does feel like understanding the hidden architecture of global finance.
small correction (great primer otherwise!)- below should be Rec EUR/USD basis if expected to widen (become more negative) rel to GBP/USD
"Specifically, if you expect the EUR/USD basis to widen further (i.e., become more negative) relative to GBP/USD, you would pay the EUR/USD basis and receive the GBP/USD basis".
Great write up.
Apart from the recent CME tools, how do you monitor the xccy basis if you don’t have a Bloomberg?
Good qu...if you have Reuters/Refinitiv access they have it, but aside from that CME tools is the only free tool we've seen.
CME should expand into other currency pairs. Next step should be JPY if they offer the TONAR futs.
https://www.cmegroup.com/markets/interest-rates/cme-group-cross-currency-basis-watch.html
This is a super article! Thank you for sharing
really well explained piece - I like it a lot.
great primer. i'm learning as much as i can in all FX and rates related topics. other arguments i'de be interest in (and love to read about from you) are RePo markets (players, role in carry trades, data tools)
PS. CME tool seems to have stopped working (gives wrong basis values)
Perfect timing. A repo primer is in the works. Will be released this weekend (if all goes to plan).
Will chat to CME about the issue.
awesome news will be waiting for it when ready!
Thanks for the CME tool btw
Great article! best primer i've read on XCCY. Really enjoyed reading this one
Never seen a more detailed explanation. Excellent.
Thank you for the kind words.
One of the clearest explanations of the cross-currency basis I’ve seen.
Especially liked how you tied the basis to deeper structural forces — not just rates and funding, but also herd behavior, regulatory pressure, and macro liquidity shifts.
Mastering this really does feel like understanding the hidden architecture of global finance.
great work
small correction (great primer otherwise!)- below should be Rec EUR/USD basis if expected to widen (become more negative) rel to GBP/USD
"Specifically, if you expect the EUR/USD basis to widen further (i.e., become more negative) relative to GBP/USD, you would pay the EUR/USD basis and receive the GBP/USD basis".
Good spot sir!