The top blue line - Euribor 3M, is the European version of the LIBOR. "Euribors are used as a reference rate for euro-denominated forward rate agreements, short term interest rate futures contracts and interest rate swaps, in very much the same way as LIBORs are commonly used for Sterling and US dollar-denominated instruments.
They thus provide the basis for some of the world's most liquid and active interest rate markets."
The Euribor is supposed to be the benchmark of safety. For example, the
Eurozone finance ministers used the Euribor rate as the 'base rate' in calculating Greece's interest rate premium. As the Euribor rises, so does Greece's payment.
A blowout in the Euribor suggests systemic risk.The second pink line on the left side is very similar - Libor ECU 3 months, or the Libor rate in euros. Not shown here is the Libor ECU 1 month, 6 month, and 12 months, all of which have been ticking upward. Also, the key dollar and sterling Libor have been ticking up for 5 days in a row.
Tyler Durden takes it from here: "This is a little more subtle but look at the second chart, the one on the right... EU libor vs repo is widening (pink line) in last 2 days, and also dollar libor is rising faster than euribor (decline in blue line in right chart), ie dollars are harder to come by vs euros in the eu interbank market. expected. but most strikingly, the spread between 3m and o/n repo in europe is skyrocketing (yellow line), which means it is getting harder to secure funding on a 3 month basis using ECB collateral vs going to the window overnight. bad bad bad. means players are less inclined to lend collateralized money out at 3mths. We are watching an insolvency crisis become a liquidity crisis in real-time. "
http://www.zerohedge.com/article/how-europes-solvency-crisis-morphing-liquidity-crisis-spread-between-overnight-and-3m-ecb-re
