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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (1800)	5/26/2000 1:14:00 PM
From: hugh thorne	Respond to of 33421

An interesting issue arises regarding these industry lead purchase groups. If such "co-operation" were seen on the output side of the economic transactions, i think we could describe the relationships as somewhat cartel like. The fact that these relationships are developing in respect of the input units of the transactions doesn't diminish their ability to control the pricing models within the particular sector. If i were an industry group i think i would be inclined to use an outsource for the structure in order to insert as much "arms-length" into the equation as possible. By the way John, this is a very good thread, only stumbled on it about 45 days ago.

To: John Pitera who wrote (1800)	5/27/2000 1:26:00 AM
From: John Pitera	Read Replies (2) \| Respond to of 33421

The Fed fund futures are very specifically what the Fed Funds rate will be at contract settlement every month. The money center banks use the Fed Fund futures to Hedge and game the probability of future Federal Reserve Interest rate hikes. The primary tool to influence Monetary Policy is through increasing and decreasing the Federal Funds Rate. --------------- Here are the quotes, the Fed Funds futures are calculated very easily. If the futures are at 98 that means that they are forecasting a 2% Fed Funds Rate. if the futures are at 90, they are forecasting a 10% FFunds rate. we rallied today. cbot.com ---------------- cbot.com ------------------- Trading Unit $5 million Price Basis 100 minus the monthly average overnight fed funds rate for the delivery month; for example, a 7.25 percent rate equals 92.75 Tick Size Increments of 1/2 of 1/100 of 1 percent of $5 million on a 30-day basis ($20.84) Daily Price Limit 150 basis points (variable trading limits of 225 basis points); no limit in the spot month Contract Months First 25 calendar months (and the next two months in the Mar, Jun, Sept, Dec cycle thereafter) Settlement The contract will be cash settled to the nearest half-basis point against the simple average overnight fed funds rate for the delivery month. The overnight fed funds rate is calculated and reported daily by the Federal Reserve Bank of New York. Last Trading Day Last business day of the delivery month Trading Hours Open Outcry: 7:20 a.m. - 2:00 p.m. Chicago time, Mon-Fri. Project A©: Afternoon session 2:15 - 4:30 p.m., Chicago time, Mon-Thu Overnight session 6:00 p.m. - 5:00 a.m., Chicago time, Sun-Thu Trading in expiring contracts closes at noon on the last trading day. Ticker Symbol FF Subject to change ---------------- today's Fed Funds action as reported in the WSJ FEDERAL FUNDS: 6 11/16% high, 6 5/16% low, 6 3/8 % near closing bid, 6 1/2 % offered. Reserves traded among commercial banks for overnight use in amounts of $1 million or more. Source:Prebon Yamane(U.S.A)Inc. FOMC fed funds target rate 6.50% effective 5/16/00.* so the Fed Funds are not quite looking at a move to 6.75. watch these cash rates and the futures. you'll learn very much amigo!!!!!!! ---------------------- cbot.com Press Release For Immediate Release Katherine Spring 312435-3777 CHICAGO BOARD OF TRADE FED FUNDS CONTINUE TO BREAK RECORD OPEN INTEREST LEVELS -- VOLUME UP 122.9% YTD Chicago, April 19, 2000 -- The Chicago Board of Trade announced today that CBOT members have set five consecutive daily open interest records in the 30-day Federal Funds futures contract during the month of April. The most recent daily open interest record of 55,517 contracts was set yesterday. The ballooning open interest trend began during the month of March, when members set seven consecutive open interest records between March 23 and March 31. Open interest remained high in early April, and ballooned to record levels for the last five trading days. Prior to the March upswing, the Fed Funds open interest record was 46,419 contracts, set on September 25, 1998. The current daily volume record in the Fed Funds is 18,887 contracts, set February 2, 2000. The steadily increasing April open interest record levels are: April 12: 47,353 April 13: 49,671 April 14: 54,136 April 17: 54,894 April 18: 55,517