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Technical analysis: Euribor Futures

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Euribor – December 2009

Thu, Oct 1 2009, 08:21 GMT
by Nicole Elliott

Mizuho Corporate Bank


Comment: Eurozone interbank offered rates are edging a little higher than those in London, and Euribor futures sold off from record highs on very good volume yesterday. The Eurozone yield curve has flattened considerably over the last two weeks, the start of a longer term process we feel, and EZ16 index-linked Treasuries yield less than they have ever done as government budget deficits inflate rapidly. Three-month Libor at 71 basis points today, ones fixed at 0.395% at the BBA - well below the ECB’s 1.00% target rate. This should continue the series of rates inching lower, and futures contracts (especially June and September 2010) creeping higher, as always with the potential for sudden slips on any sign of banking jitters.

Strategy: Attempt small longs at 99.235; stop below 99.150. Upside target 99.320/99.400.


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Mizuho Corporate Bank  | 1-3-3, Marunouchi, Chiyoda-ku, Tokyo 100-8210
http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk

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