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Reds Extending Inversion

US EURODLR FUTURES
Odd kink in Eurodollar Reds as front end of strip trades steady to higher now as inversion between EDM3 (+0.005 at 96.545) and balance of strip extends EDU3-EDZ3 +0.030-0.025 at 96.56 and 96.66 respectively. Reds outperforming balance of strip (-0.005-0.065, Golds underperforming) now.
  • Inversion a low measure of confidence in forward policy and/or Fed managing a soft landing/avoiding recession.
  • Trading desks note pick-up in Eurodlr/SOFR spds in Jun'22 (0.285) and Sep'22 (0.235) around same time.

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