Eurodollar Future – March 2010

Nicole Elliott from Mizuho Corporate Bank at 11/20/09

Comment: Eurodollar futures have taken on board the new reality – that ultra-low interest rates are likely to be with us for a very long time – even front Dec rallying for six consecutive weeks despite trading perilously close to 100.00. Front Sep and red Dec still have plenty of room to move higher, and TNote yields should drop as investors are forced out along the yield curve. Caution is warranted as year-end pressures might emerge, or more likely just a dose of the jitters.

Strategy: Possibly attempt small longs at 99.665 but only if prepared to add to 99.575; stop well below 99.500. Upside target 99.725/99.800.