LIBOR and Eurodollar deposits have leaped higher today as interest rates continue to drop even lower! The two futures are closely linked, since Eurodollar deposits are settled at the LIBOR rate. Both represent short-term interest rates on foreign deposits of US Dollars. The Eurodollar is much easier to trade, since it is far more liquid and maintains a very tight, 1-tick bid/ask spread almost around the clock!From Bloomberg:
"Libor, the benchmark for $360 trillion of financial products worldwide, is set by a panel of banks in a survey by the BBA before noon each day in London. The euro interbank offered rate, or Euribor, is published by the European Banking Federation earlier in the day."Here is another one from Bloomberg that offers a very good explanation of various Interbank rates.
There appears to be a fundamental global conflict between bonds and equities right now. Bond prices seem to be predicting near-depression-era economic results, while equities are signaling a bottom for the stock markets. TED spreads typically have been one of the most reliable indicators of recessions throughout several decades, and they remain quite bearish despite improvements in recent days and weeks.
