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Technical analysis: EuroDollar Futures
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Eurodollar Future – Dec 2008
Fri, Nov 28 2008, 08:47 GMT
by Nicole Elliott
Comment: Long-dated Treasury yields are tumbling, and the yield curve is flattening at an alarming pace as investors wake up to the enormity of the financial problems we face. There is still a lot more of the same to come, but note that yields on other instruments and for other names are actually going up simultaneously. November Fed Funds futures are priced for a 0.40% target and six-month TBills likewise at 0.48%. We feel that Eurodollar futures contracts are underestimating how far the money market can move away from official target rates, especially over year-end, and therefore implied volatility should remain grotesquely high. A potential ‘double top’ around 98.150 suggests another drop to 97.700/97.600 area, maybe a lot more over the next two weeks.
Strategy: Sell 97.900; stop above 98.185. Add to shorts on a weekly close below 97.650 for 97.450.
Published on Fri, Nov 28 2008, 08:47 GMT
Archive
- Eurodollar Future – Dec 2008
Published On Fri, Nov 28 2008, 08:47 GMT - Eurodollar Future – Dec 2008
Published On Fri, Nov 21 2008, 09:38 GMT - Eurodollar Future – Dec 2008
Published On Fri, Nov 14 2008, 10:09 GMT - Eurodollar Future – Dec 2008
Published On Fri, Oct 31 2008, 10:35 GMT - Eurodollar Future – Dec 2008
Published On Fri, Oct 24 2008, 08:33 GMT
Mizuho Corporate Bank
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http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk
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