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I know the front Eurodollar is most closely tied to 3Mo LIBOR fix published daily, as that is what it settles to. I also know information that affects expectations of very short term rate hikes will impact this rate (if prior to settle). This of course means economic numbers and fed actions.

However, I’ve heard there are other “obvious” drivers of its price. I am curious if this means OTC transactions? Naturally swaps and FRAs seem related, but I’m not sure if these matter since they are harder to observe for many market participants. Perhaps other farther out futures on the rates curve, even though those can be targeting farther out moves?

I am not looking to trade this, as I am still at University, I just want to understand this better and I don’t have the funds for all sorts of market data.

I am student, so I apologize if this is a trivial question with an obvious answer.

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  • $\begingroup$ I do not think there is any mysterious drivers here that you don't already know about. Anything that will affect short term rates, such as stronger than expected US growth, stronger than expected inflation, bigger need to finance the US govt, dollar based financial institutions getting in trouble ... will raise rates and send the future down. $\endgroup$ – noob2 Oct 17 '18 at 22:44

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