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STIR FUTURES

Waiting for German inflation and US GDP

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Price Signal Summary - USDJPY Cracks 130.00

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Buxl Sep put fly

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10Y Yield Approaching 200DMA Resistance

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FED FUNDS FUTURES
FED FUNDS FUTURES: Zero is just another number, not a lower bound when subject
of negative rates raised with a minority of market analysts. The majority of
researchers still do not see rates going negative despite implications of the
ongoing bid in 2021 Fed fund futures strip over 100.0 to as high as 100.060
(+0.010-0.045) that is bleeding over to early 2022, albeit on very light
volumes. More liquid Eurodollar futures in same sector trade +0.030-0.045 from
99.855-.99.85.
* CIBC's Ian Pollick said move "is more likely due to the excess amount of cash
in the market rather than a statement that the market expects the Fed to slash
rates to negative."
* But as Wrightson ICAP noted earlier the "longer the Fed is perceived to
tolerate negative quotes in the futures market, the more widespread the
conviction that overnight rates will indeed turn negative will become. And if
that expectation becomes deeply
entrenched, the cost of disappointing the market later this year will rise."
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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