Post-LIBOR Settle Update: Lead Reverses Gain on New 3M High

Lead quarterly EDM2 reverses bid - trades weaker at 98.285 (-0.015), extends overnight low after latest 3M LIBOR set' climbs to new 2-year high of 1.13629% (+0.03800), up +0.07358 for the week.

• Otherwise - moderate bounce after Tue's route continues: balance of Whites (EDU2-EDH3) trade +0.010-0.020 higher, Reds through Greens (EDM3EDH5) +0.030-0.040, Blues through Golds (EDM5-EDH7) +0.040-0.065.
• Price inversion holding: Red Sep (EDU3) currently trading 96.555 vs. Red Jun (EDM3) at 96.540 -- low measure of confidence in forward policy and/or Fed managing a soft landing/avoiding recession has been priced in for months.
• Levels start to flatten out (dis-invert) around late Blue Sep'25-Dec'25 trading 97.005-.015.
• Tuesday derivatives roundup: Eurodollar options saw much better call buying, primarily in 1- and 3Y midcurves -- buying insurance or fading the sell-off in underlying as futures priced in more aggressive rate hikes after StL Fed Bullard opened dialog on chance of 75bp hike at May 4 FOMC late Monday.
  
• Weighing on short end and contributing to inverted prices in Eurodollar Reds (EDM3-EDH4) through Blues (EDM5-EDH6) as rising recession concerns and/or ability of Fed to engineer a soft landing continues. Adding to the weaker tone (higher rates) IMF joined World bank opinion from late Monday: knock-on effect of Russia invasion reducing global growth/increase inflation forecasts.