• ECB central bankers, thirsty for profits, will see their wishes fullfilled next year. I expect that in 2027, money market spread tightening will accelerate, and banks in the Netherlands and France will start to show up at the LTRO and MRO auctions;

• So far, spread tigthening has been gradual and proportional to the decline in excess reserves stemming from ECB Quantitative Tightening. Spread tightening will likely accelerate first in the secured market given the fact that sizeable amounts of bonds that roll off the ECB balance sheet are mopped up by leveraged types;

• The ECB's approach to liquidity management stands in stark contrast with the Fed's framework. Preferably, the Fed wants to do as little collaterlized lending to banks as possible. On the other hand, our friends at the ECB are litererally dying for the opportuinity to lend to banks. And finally make a profit.

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