Rockets and feathers: why your cash never quite keeps up

When oil prices jump, filling up costs more almost immediately. When crude falls back, the number on the forecourt sign takes its time. Economists named the pattern in a 1991 study of UK petrol pricing: rockets and feathers.

In fairness to fuel retailers, the evidence there is mixed. The ECB reviewed it in July 2026 and found earlier euro area studies showed no clear asymmetry, more recent work suggests pass-through may be slower on the way down, and further analysis is needed.

There is one market, though, where the gap isn't a matter of debate. It's the one your business cash sits in — and the central bank publishes the numbers every month.

The 148 basis points nobody mentions

In December 2025, the ECB's deposit facility rate was 2.00%. That same month, the average rate paid on overnight deposits from euro area non-financial corporations was 0.52%.

A gap of roughly 148 basis points, on the ECB's own statistics, for exactly the kind of account many businesses keep their working cash in. On a million euro, that’s a market gap of about €14,800 a year between what short-term money earned at the central bank and what overnight business deposits earned on average. 

Two details sharpen it. Corporates who agreed to tie their money up for a fixed term received 1.95% — so the money exists, it just isn't paid on balances you can actually reach. And the 0.52% didn't move at all that month. It had been sitting at exactly that level in October and November too. Three months, no movement. That's the feather.

Now count how many currencies you hold

Here's where it stops being a European story.

If you run a business that sells across borders, you don't hold one currency — you hold the ones your customers pay you in. Euro from the Netherlands and Germany. Dollars from the US. Sterling from the UK. Maybe Singapore or Hong Kong dollars if you're selling into Asia.

Every one of those balances is subject to the same asymmetry, in its own rate cycle, set by its own central bank. The gap doesn't apply once. It applies per currency, per year, for as long as the cash sits there.

And there's a second problem stacked on the first. Providers tend to compete hardest on the home currency and offer considerably less — sometimes nothing at all — on the others. A business banking in Australia can usually find a reasonable rate on Australian dollars. Ask about the US dollars sitting in the same relationship and the conversation gets shorter.

Which leaves most cross-border businesses with two unappealing options: leave the foreign currency balances earning nothing, or convert them into the home currency to earn something — and pay FX both ways for the privilege, on money they'll need in the original currency next quarter anyway.

Neither is treasury management. Both leave value on the table.

Why the asymmetry runs both ways

The level is only half of it. The speed is the other half.

ECB research on euro area deposit pricing puts the long-run "deposit beta" for household overnight deposits at around 0.25 — falling to roughly 0.1 during 2022–2024. Most of a rate rise doesn't reach the depositor. The same research finds deposit rates respond more strongly when the central bank cuts than when it raises.

Rockets and feathers, arrows reversed. The rate you receive drops briskly when policy eases and inches up when policy tightens.

Inside the engine room

A money market fund pools cash from many corporates and institutions to buy short-term, high-grade debt — Commercial Paper, Certificates of Deposit, Treasury Bills and reverse repurchase agreements — at institutional scale. Instead of leaving cash on deposit, your business invests in a fund that does the lending for you. It is not a deposit, though: the fund’s value and yield can move, and your capital isn’t guaranteed. 

Three safeguards are written into law rather than left to a manager's judgement. Under the EU Money Market Fund Regulation:

• Every instrument passes a documented credit quality assessment before the fund can buy it.

• Maturities are capped. For short-term funds, the portfolio's weighted average maturity can't exceed 60 days and its weighted average life can't exceed 120 days. 

• Liquidity is mandatory. Low-volatility NAV and public debt funds must hold at least 10% of assets in instruments maturing daily, or in cash and reverse repo redeemable on one working day's notice.

As for who's borrowing: across the EU money market fund sector as a whole, ESMA's supervisory data shows average exposures to credit institutions of around 60% of total assets, with government debt the next largest block. Highly rated banks and sovereigns, in other words, lending short. Corporate paper is the smaller slice — the euro commercial paper market is the preserve of well-established multinationals and financial institutions with strong credit ratings.

Because a fund runs on a rolling ladder of short-dated notes, its yield tracks policy rates far more closely than a deposit rate does. When rates rise, notes maturing within days are reinvested at the new level — fund yields have historically moved nearly concurrently with policy rates while deposit rates lagged.When rates fall, notes already held keep earning their original rate until they mature, so the fund’s yield comes down gradually rather than overnight. A maturity ladder can’t be repriced by announcement. It has to expire first. 

This is not new or exotic. ESMA sized the EU sector at €1.44 trillion as at 2021, with professional investors holding more than 90% of assets. These funds aim for liquidity and capital stability rather than growth, which is why treasury teams have used them for decades.

What's been missing for most businesses isn't the instrument. It's access — and the ability to use it in more than one currency without building a treasury function to manage it.

Earn in the currencies you already hold

That's what Yield does.

Variable net yield in multiple currencies, accruing daily. Earn on the currencies your business already holds - (EUR, USD, GBP) - and keep holding them - and spending them - without converting back and forth to chase a rate.

No minimums, no lock-up periods. Remember the 1.95% that euro area corporates earned on fixed-term money? That rate came with a condition:  your cash is committed. Yield doesn’t ask for that. Balances move in and out as the business needs them, with most redemptions settling within [two] business days, and instant settlement to your Airwallex wallet available for a [X%] fee. Liquidity you can plan around - with a yield that’s variable rather than fixed.

One place, not four. Most businesses that solve the yield problem end up creating a different one: a separate provider, separate onboarding, separate reconciliation — multiplied by every currency. Yield sits inside the Airwallex account you already use to receive, hold, convert and pay out, so moving cash between working and earning balances is a transfer rather than a project.

The funds behind it are managed by J.P. Morgan Asset Management, and in Europe Yield is provided by Airwallex Capital (Netherlands) B.V., an investment firm authorised by the Dutch AFM.

Want to see how it works? Explore Yield in your Airwallex account, check the current variable net yield and read the fund documents before you decide.

You've read why cash on deposit can lag the market. You’ve seen what sits inside a money market fund. Now you can decide whether it belongs in your treasury. 

Stop waiting for the sign on the forecourt to change.

• https://www.sciencedirect.com/science/article/abs/pii/014098839190022R

• https://www.ecb.europa.eu/press/blog/date/2026/html/ecb.blog20260731~6224db57f8.en.html

• https://www.ecb.europa.eu/press/pr/date/2025/html/ecb.mp251218~58b0e415a6.en.html

• https://www.ecb.europa.eu/press/stats/mfi/html/ecb.mir2602~11392d94d2.en.html

• https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp3255~7622aab746.en.pdf

• https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02017R1131-20240109

• https://www.esma.europa.eu/press-news/esma-news/esma-report-finds-eu-mmf-industry-close-eu15tn

• https://www.icmagroup.org/assets/documents/Regulatory/CP/ICMA-CPC-white-paper-The-European-Commercial-Paper-and-Certificates-of-Deposit-Market-September-2021-290921.pdf

• https://www.kansascityfed.org/research/economic-bulletin/bank-deposit-rates-havent-kept-pace-with-yields-on-other-investments-but-depositors-are-staying-anyway/

• https://www.esma.europa.eu/press-news/esma-news/esma-report-finds-eu-mmf-industry-close-eu15tn