Euro$ interest rate futures are on the defensive
Euro$ interest rate futures are on the defensive in contrast to stocks and longer-dated Treasury coupons, with the Fed hike baked in along with a more dovish spin. This is keeping the more short-dated rate contracts under pressure near-term after a stronger run on more dovish Fedspeak this month. The March 2019 contract is a half-tick lower near 97.285 (2.715% implied 3-month yield), with the deferreds 1-3 ticks lower further out. The March contract is still well up from October lows of 97.055 (2.945%) when the Fed was still far from "neutral." Though analysts don't believe the Fed is ready yet to throw in the towel on the normalization cycle, which could put 97.17 (50% retrace area) back in scope near-term, if further financial tightness takes place, the 97.46/97.49 May high zone could be retested.