Euro$ interest rate futures are lower
Euro$ interest rate futures are lower with stocks digging in above lows and yields backing up a bit as well, despite the tepid round of retail sales data accompanied by firmer Empire State earlier. Former Fed chair Yellen voiced concerns about the economy overheating and the need to move rates to neutral to stabilize the labor market as well. The December 2018 contract is 1.5-ticks lower near 97.31 (2.69% implied 3-month yield), while the deferreds are 2.5-2.0 ticks lower out the curve. Risk is for a test lower to August 97.305 lows or June 97.275 lows on the policy trajectory alone, unless the Wall Street correction extends. The Fed will likely keep a weather eye on the asset markets and has a pause penciled in for November anyway, but steeper declines on Wall Street and deleveraging could cause deeper reflection. Next Fedspeak comes from Mary Daly of the SF Fed late Tuesday, topic unknown.