What to watch

There have been some wild swings in equities over the past couple of days. Core fixed income has largely escaped the volatility, instead focusing on events in Ukraine, poor European PMIs and pre-positioning ahead of the Fed meeting.

• However, Eurodollar futures are one fixed instrument which hasn't escaped the large moves. Indeed, as the chart below shows, the Jun-23 Eurodollar futures contract (right-hand-side; inverted) has closely tracked the S&P e-mini contract over the past few days. With the Fed meeting tomorrow, there is potential for this correlation to break down, but at least over the next few hours, we would expect this to hold. SONIA and Euribor futures have been far less correlated with equity moves.
• On the calendar today, the highlights are the German IFO, Belgian business confidence and US Conference Board Consumer Confidence. The German IFO is likely to be the most significant.