Euribor – June 2010

Nicole Elliott from Mizuho Corporate Bank at 12/17/09

Comment: Treasury yields may have backed up this week but Index-Linked and front month money market futures are still priced for Armageddon. The supposedly ‘final’ one-year ECB tender yesterday saw another €96.9B injected into the banking system – while Mr. Trichet says he has started his carefully designed exit strategy. This Euribor contract is trying to break above ‘triangle’ consolidation and we still favour rallies to new contract highs in many Euribor futures, front September probably having the greatest upside potential.

Strategy: Buy at 98.920 but only if prepared to add to add to 98.840; stop below 98.800. First target 98.950, then 99.125/99.180.