Technical analysis: EuroDollar Futures
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Eurodollar Future – Dec 2008
Fri, Aug 8 2008, 09:20 GMT
by Nicole Elliott
Comment: Tremendous uncertainty as to the absolute levels of US interest rates and the shape of the yield curve. We feel that five-year TNotes are leading the way to lower yields, and that soon the Treasury curve should flatten again as we prepare for another year-end credit super-crunch. This explains why open interest in the Dec08 Eurodollar future is holding up so well while it shrinks in other months and should also lead to wider credit spreads (three-month TED Spread at 200?). As for US Libor rates, they are a figment of some traders’ lively imaginations. They bear little relationship to where cash actually is, and even less to the Fed Funds target, yet some have the nerve to say the worst is over. This futures contract cannot hang around here for much longer but we are very unsure as to which way it will jump. At the moment we still favour a ‘spike high’ followed by a drift slightly lower. However, a weekly close above 95.200 would force us to change tack and target 98.000.
Strategy: Attempt shorts at 97.020; stop above 97.115. Add to shorts on a daily close below 94.890 for 96.695 and maybe 96.565.
Published on Fri, Aug 8 2008, 09:22 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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