The Market’s Initial Take
Trading is open on CME GLOBEX. Equity indices up slightly–S&P emini up 1.75, Dow up 20, NASDAQ up 4.25. Dollar stronger across the board, including decent gains against the pound and the Euro. Perhaps most importantly, Eurodollar futures up 2.5 (meaning a 2.5 basis point decline in forward 3 month LIBOR) and Fed Fund futures are down (meaning a 3 basis point increase in the Fed Funds forward rate), meaning that the credit spread has narrowed a bit–about 5.5 basis points. Treasuries are also down.
Seems like a cautious, tentative endorsement of what’s going on.
