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Fitch Ratings and Citi both published briefs on the commercial paper market yesterday, so we decided to take a look at how the CP sector overall has fared of late. The answer is: surprisingly well. CP outstandings have remained almost unchanged at just below $1 trillion throughout the period when Prime money fund assets declined by $1.1 trillion. According to the Federal Reserve's Commercial Paper Outstanding numbers show CP totaling $941.5 billion at the end of 2015 vs. $884.9 billion at the end of 2016, and vs. $937.2 billion at the end of March 2017. We discuss the CP market and review the Fitch and Citi updates below.

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With now less than 2 months to go before our big show, Crane's Money Fund Symposium, which will be in Atlanta, Georgia (June 21-23), we are also preparing for our 5th Annual European Money Fund Symposium, the largest money market event in Europe. The preliminary agenda is almost ready for this year's show, which will take place Sept. 25-26 in Paris, France. See below or contact us for details. Also, if you haven't registered yet for Money Fund Symposium, you can still do so via www.moneyfundsymposium.com. (We look forward to seeing many of you in Atlanta in June or Paris in September!)

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The U.S. Securities and Exchange Commission released its latest "Money Market Fund Statistics" summary late last week. It shows that total assets were flat (down a fraction) in March, with Prime funds gaining $12.1 billion (after gaining $24.9B in Feb.), Tax Exempt MMFs losing $0.6 billion and Government funds losing $14.5 billion. Gross yields jumped for both Taxable MMFs and Tax Exempt MMFs following the mid-month Fed hike. The SEC's Division of Investment Management summarizes monthly Form N-MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review the SEC's latest recap below.

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Money market mutual fund assets fell on tax related declines in the latest week and fell for the sixth straight week. Since March 8, assets have fallen by $61.7 billion, or -2.3%, and year-to-date assets have fallen by $102.5 billion, or 3.8%. Prime assets fell by $3.0 billion in the latest week, which included the April 15 (18) tax deadline, but they've only declined by $843 million, or -0.2% over the past six weeks. YTD, Prime MMF assets are up by $20.1 billion, or 5.3%. Government MMF assets, meanwhile, fell $11.9 billion this week, $59.9 billion over 6 weeks, and $119.9 (-5.4%) YTD. We review the latest money fund asset totals, as well as J.P. Morgan's latest Portfolio Holdings update, below.

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The Bank for International Settlements' Committee on the Global Financial System published a paper on, "Repo market functioning (CGFS Papers No 59)." The Executive Summary says, "Repo markets play a key role in facilitating the flow of cash and securities around the financial system. They offer a low-risk and liquid investment for cash, as well as the efficient management of liquidity and collateral by financial and non-financial firms. A well functioning repo market also supports liquidity and price discovery in cash markets, helping to improve the efficient allocation of capital and to reduce the funding costs of firms in the real economy. However, excessive use of repos can facilitate the build-up of leverage and encourage reliance on short-term funding." (Note: Thanks to Russ Ives from Ives Associates and Garret Sloan from Wells Fargo Securities for pointing out this paper.)

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This month, our Money Fund Intelligence newsletter spoke with Paul Przybylski, Executive Director, Head of Global Liquidity Product Development & Strategy for J.P. Morgan Asset Management, and we also include a couple of comments from some other members of the JPMAM team. We discussed recent trends in the global money markets, including the gradual shift back into Prime money funds in 2017 and how the pending European money fund reforms will affect "offshore" cash investments. JPMAM is the 3rd largest U.S. money fund manager and the 2nd largest MMF manager globally, with over $250 billion in US assets and another $150+ billion in Europe and elsewhere. Our Q&A follows. (This interview is reprinted from the April issue of our flagship Money Fund Intelligence newsletter; e-mail info@cranedata.com to request the full issue.)

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Last Thursday, Treasury Strategies held its latest "Quarterly Corporate Cash Briefing," hosted by Treasury Strategies' Kevin Ruiz and Anthony Carfang, and featuring Deborah Cunningham from Federated Investors, Gregory Fayvilevich from Fitch Ratings, Michelle Price from the Association of Corporate Treasurers. The invitation for the session, entitled, "Managing Corporate Cash – More Critical Than Ever," explained, "The one thing 2017 has not been is boring. We have seen drastic political and economic changes worldwide, yet global financial markets seem to be humming along. What more is in store for us in 2017? Please join us in the largest and longest-running conversation on corporate cash decisions in the financial industry." We quote from some of the highlights below.

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The April issue of Crane Data's Bond Fund Intelligence, which was sent out to subscribers Friday, features the lead story, "Battle Brews Over Bond Fund Indexing; Record Inflow in Q1," which reviews some recent pro and con articles on active management vs. indexing. BFI also includes the article, "Bond Fund Symposium Highlights: Ultra-Shorts Big," which reviews our recent inaugural bond fund conference in Boston. In addition, we recap the latest Bond Fund News, including briefs such as, "Bond Fund Yields & Returns Higher in March." BFI also includes our Crane BFI Indexes, averages and summaries of major bond fund categories. We excerpt from the latest issue below. (Contact us if you'd like to see a copy of our latest Bond Fund Intelligence and BFI XLS data spreadsheet, and watch for news about our new Bond Fund Portfolio Holdings "beta" product next month.)

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Last week, Federal Reserve Bank of New York Executive Vice President Simon Potter spoke on "Money Markets at a Crossroads: Policy Implementation at a Time of Structural Change," where he discussed the Fed's "new and innovative framework to control money market rates." Potter says, "Since late 2015, we have seen several significant developments in money markets that have tested this new framework. These include a profound reshaping of the money market fund industry as a result of new Securities and Exchange Commission (SEC) rules, significant shifts in cash management practices at the Treasury and large foreign reserve managers, and continued pressure on bank balance sheets due to the ongoing implementation of Basel III capital requirements. Also since that time, the Federal Open Market Committee (FOMC) has directed three 25 basis point increases in its target range for the federal funds rate."

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Crane Data released its April Money Fund Portfolio Holdings yesterday, and our latest collection of taxable money market securities, with data as of March 31, 2017, shows a decline in Agencies, and a jump in Repo; "credit" -- CDs and CP -- was flat. Money market securities held by Taxable U.S. money funds overall (tracked by Crane Data) decreased by $11.8 billion to $2.635 trillion last month, after decreasing $18.1 billion in Feb., but increasing by $7.2 billion in Jan. and $34.7 billion in Dec. Repo remained the largest portfolio segment, followed by Treasuries and Agencies. CDs were slightly lower but remained in fourth place, followed by Commercial Paper, Other/Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics. (Visit our Content center to download the latest files, or contact us if you'd like to see a sample of our latest Portfolio Holdings Reports.)

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Crane Data's latest Money Fund Market Share rankings show about half of U.S. money fund complexes declining in March with overall assets down moderately. Total assets decreased $24.8 billion, or -0.9%, last month. Overall assets decreased by $12.0 billion, or -0.4%, over the past 3 months, and they've increased by $64.2 billion, or 2.4% over the past 12 months through March 31. The biggest gainers in March were Dreyfus/BNY Mellon, whose MMFs rose by $5.3 billion, or 3.5%, Vanguard, whose MMFs rose by $3.2 billion, or 1.2%, and Schwab, whose MMFs rose by $1.4 billion, or 0.9%. First American, Federated, Wells Fargo, HSBC and T Rowe Price also saw assets increase slightly in March, rising by $505M, $457M, $388M, $304M, and $284M, respectively. The biggest declines were seen by BlackRock, Morgan Stanley, Goldman Sachs, SSgA and Western. (Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product, and the combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers.) We review these market share totals below, and we also look at money fund yields the past month, which moved higher again.

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Last week, BNY Mellon's Dreyfus launched a new "podcast" series entitled, "Invested in cash," which "will feature some of the greatest minds within cash management sharing ideas, trends, changes, and opportunities across the spectrum of liquidity investing." The inaugural podcast features Patricia Larkin, Chief Investment Officer of the Dreyfus Money Market Funds. The description says, "Larkin frames the short-term fixed income market and how it is affected by rate hikes and inflation. She also discusses how investors may want to think about the market over the next several months." We excerpt from the interview below.

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