This week has been much less.....>

US EURODLR FUTURES: This week has been much less eventful than last week for the

Eurodollar futures strip. The front-end looks set to end the week generally 2

ticks higher but Blues (M2-H3) are generally unch on the week.

- The week began with the strip moving higher as momentum from last week's

dovish Fed, disappointing German PMI and concerns about the global economy

continued. The Z0 contract moved above 98.00 on Wednesday as the contract spiked

more than 45bp above its levels of a week earlier.

- However, since Wednesday markets have retraced some of these moves. It seems

to us as though this has largely been a function of moves being overdone. Other

theories we have heard have suggested more optimism on China-US trade talks or

even a more dovish tilt from the ECB helping to limit downside to the European

economy have helped to stabilise sentiment. Indeed, the highs of the Eurodollar

strip did occur shortly after Draghi's speech on Wednesday.

- As we have discussed in Talk from the Trenches, trade volumes have risen

markedly this week and one global macro fund is positioning in size for a hike

to be back on the table this year.