I use the June 2018 eurodollar futures contract as a significant benchmark in my analysis of money markets because I feel it represents a solid cross section of sometimes conflicting influences. It’s close enough to the front end as to be significant both in terms of monetary policy as a factor but far enough to be as heavily if not more representative of intermediate economic expectations. And on that account, there is still enough volume and open interest where the depth of liquidity cannot be questioned.

As of yesterday, the CME reports open interest of 416,955 contracts each for delivery of $1mm, meaning $417 billion or so in gross contracts written. Thus, to see it move so far so fast being bid is simply astounding. This morning, the June 2018 was as a high as 99.165! In closing price alone, currently at a still impressive 99.01, that’s 30 bpsjust this week. And that follows a mind-boggling collapse (for Yellen’s dreams) 103 bps in 2016 alone. Yellen ordered a quarter-point hike in federal funds and received instead four of them in reverse across the much more significant and important eurodollar complex.

We must be mindful, too, that China is closed all during this week, surrendering an easy and overseas story for causation. I don’t think China is out of the equation entirely, especially via Japan, rather it seems though the current flurry of bearishness is eurodollar all its own. The curve collapse is similarly beyond easy description.

What has happened in just one month (or so) had until January typically taken three months or more to accomplish. I think that offers sufficient commentary on the state of liquidity in the eurodollar world at this moment, apologies to the FOMC.

As such, any and all of the “safety” assets and bids are just as active and impressive; from gold to UST’s to the usual suspect currencies especially yen and franc.

If I am right about Japanese banks acting a primary “dollar” conduit for China, and I think that increasingly likely, then what will China look like on Monday for reopening? I doubt very much as if PBOC officials and really the trading and planning staff were able to participate in the holiday; many candles likely burnt at both ends.