WEEKLY UPDATE: The Eurodollar futures...>

EURO-DOLLAR: WEEKLY UPDATE: The Eurodollar futures strip has shifted higher this

week as optimism has picked up following a slew of positive economic data in the

US and increased optimism that the US and China might be making some progress on

trade talks.

- Whites (EDZ8-EDU9) are largely unchanged on the week while Reds (EDZ9-EDU0),

Greens (EDZ0-EDU1) and Blues (EDZ1-EDU2) are 2-3 ticks lower on the week. With

the Fed in its black out period, we have not had Fed speakers this week to move

the market.

- Just as with Short Sterling and Euribor, these small weekly moves mask the

volatility seen in Eurodollar markets this week, with the global risk

environment and Brexit being a driving factor for STIR markets this week.

- The Fed will announce its rate decision on Wednesday with most in the market

still expecting a 25bp hike, but markets not fully pricing this scenario at

present. If the Fed do hike, we would expect to see Whites move lower, but the

rest of the curve is likely to be at the mercy of the dots and the SEP. One or

two policymakers need to change their expectations to shift the median.