Euribor – June 2010

Nicole Elliott from Mizuho Corporate Bank at 12/03/09

Comment: Five-year Bobls still outperforming as investors very reluctantly move out along the yield curve. Record volume for this contract last week suggests money market dealers are also being forced to take defensive action. All eyes are on the supposedly ‘final’ one-year ECB tender on the 16th December. Mr Trichet should note the Bank of Japan’s 10 trillion yen stimulus package announced last week – almost twenty years after their super low interest policy was introduced. We still shall continue to allow for a rally to a new contract highs, in many Euribor futures, front September probably having the greatest upside potential.

Strategy: Buy at 98.800, adding to 98.715; stop below 98.650. First target 98.920, then 99.125/99.180.