Euribor – June 2010

Nicole Elliott from Mizuho Corporate Bank at 02/11/10

Comment: Above average volume in all Euribor contracts last week suggest many are fretting over money and the Eurozone. Friday saw close to record volume in this front June one, suggesting many still haven’t grasped the fact that the ECB’s 1.00% target does not represent the floor to interest rates. Futures contracts should therefore continue to creep towards Libor, which in turn might inch fractionally lower. Price dips are still seen as buying opportunities for an eventual move to new record highs around 99.300/99.350 (contract highs for Dec09 and Mar10.

Strategy: Buy at 99.075/99.050; stop below 99.000. Next target 99.125/99.150, then 99.225/99.300.