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I am trying to understand the compounding in Basis Swap. I had 2 type of basis swap trade as below

  1. USD SOFR FF BASIS LCH – compounded FF (USD-Federal Funds-H.15-OIS-COMPOUND)
  2. USD LIBOR 3M FF 3M BASIS – weighted FF (USD-Federal Funds-H.15)

Could somebody explain here why we are using different Fed Fund index here for SOFR and LIBOR?

Thanks so much!

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