Money markets us seasonally adjusted cp grows in week

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* US seasonally adjusted CP rises $6.7 bln on the week * Europe's interbank lending rates regularly hitting record lows By Chris Reese and Ana Nicolaci da Costa NEW YORK/LONDON, Aug 16 U.S. seasonally adjusted commercial paper outstanding rose $6.7 billion to $1.020 trillion in the week ended Aug. 15, the Federal Reserve said on Thursday, suggesting some increased use of the market for corporate borrowing. Without seasonal adjustments, U.S. commercial paper outstanding fell $12.5 billion to $989.5 billion. While seasonal adjustments typically smooth volatility, analysts think the gyrations that occurred during the financial crisis - which figure into the seasonal adjustment - actually make the seasonally adjusted commercial paper data appear more volatile than the figures look without the seasonal adjustments. U.S. non-seasonally adjusted foreign bank commercial paper outstanding fell $6.1 billion to $191.9 billion in the same week. Meanwhile, euro zone interbank lending rates have fallen far below their U.S. equivalent on expectations the European Central Bank will ease monetary policy further, drawing closer to the Federal Reserve's near-zero rate policy. Three-month Euribor rates have hit record lows on a regular basis since the last monetary policy meeting when ECB chief Mario Draghi said the bank's policymakers discussed the possibility of cutting rates at their August meeting but had decided it was not the time. Given U.S. rates are already near zero, further monetary easing in the world's largest economy should come in the form of non-standard measures - probably more "quantitative easing" through central bank bond-buying - explaining the growing difference between euro and dollar interbank rates, analysts said. "The divergence between the two ... is mainly due to different monetary policy expectations between the euro zone and the U.S., with markets still pricing the possibility of further policy rate cuts in the euro zone," Giuseppe Maraffino, fixed income strategist at Barclays in London said. "The market is now pricing a high probability of a refi rate cut in the euro zone and also some chance of a deposit facility (rate) in negative territory." Three month euro Libor rates were little changed on Thursday at 21 basis points, half their dollar equivalent at 43 basis points. The three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, eased to 0.339 percent from 0.341 percent on Wednesday. The ECB is expected to cut its refinancing rate by another 25 basis points to 0.5 percent in September, according to a Reuters poll of economists. Eonia forwards suggested the market expected overnight rates to fall further from current levels, to a trough of 0.068-0.018 percent in November from 0.11 percent currently. Given the deposit rate - currently at zero - serves as a floor for overnight Eonia rates, analysts said this suggested the market was pricing in some possibility of negative deposit rates.