Apr

19

I have some questions regarding eurodollars and attempted to answer them myself: Why is GE quoted as interest rates, but de facto acts like a commodity ? Why were GE quotes up (rates on eurodollar deposits down) during the 2008/2020 crises. There was lots of cash demand.

- GE futures prices DO show de facto demand for cash (any fx cash offshore demand)
- GE is priced as rate to par of deposits
- GE reacts to or anticipates FED rates, as FED reacts to cash demand
- the rate of the deposits are not directly driven by supply and demand of global cash, but are driven by "external"/ non-eurodollar-mkt interest rates
- GE quotes can not be understand by the internal supply and demand of the eurodollar mkt conclusion: even GE-quotes are interest rates, GE-quotes act de facto like commodity prices, e.g. currently show huge cash demand.

Does you agree with my answers?


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