Eurex extends its APAC trading hours in four further contracts

Darren Sinden

The latest changes will come into effect on December 10th and will mean the four additional contracts can be traded from 8.00 am Singapore or Hong Kong time creating an overlap with exchanges in Asia that offer related futures contracts.

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Futures exchange Eurex has announced a further extension to its Asian trading hours for 4 new futures contracts which are the 10 year Euro OAT (French government bonds), the STOXX Banks index, the STOXX 600 a broad-based European equity benchmark and VSTOXX which is a measure of equity volatility among Euro STOXX 50 constituents.

This development represents a move which the exchange considers to be designed to meet growing customer demand in the Asia Pacific region, however, the extended trading hours will be available to all Eurex participants regardless of their location.

In making the announcement, Eurex disclosed that almost 40% of its trading volume comes from agency accounts in Asia Pacific region.

The exchange has previously extended the Asian trading hours of its most liquid contracts including the DAX, Euro STOXX 50 equity index futures and the Euro-Bund, -Bobl, – Schatz and Buxl interest rate complex.

The exchange also highlighted a 102% year over year growth in average daily trading volumes in Asia, with more than 20 million contracts traded during that particular extended session.

The latest changes will come into effect on December 10th and will mean the four additional contracts can be traded from 8.00 am Singapore or Hong Kong time creating an overlap with exchanges in Asia that offer related futures contracts.

This could open up spread trading opportunities between European Govt bonds and JGBs or German short term interest rate contracts and their Australian equivalents.

Futures markets participants in Asia welcomed the move, with Tim Lu, Head of Futures Market Making APAC, at Maven Securities having said “Eurex’s trading hour extension initiative will expand the pricing transparency of listed futures to additional key benchmarks during Asian hours, enabling more efficient risk management and price discovery.”

Adding further perspective, Russell Beattie, Director, Head of Asia Pacific, Futures & Options and OTC Clearing at BofA Securities added “The extension of trading hours on further products will provide our clients with more trading and hedging opportunities(and) they will be able to trade these products in all time zones –Asia, Europe and the U.S. seamlessly with BofA Securities global electronic trading services.”

Eurex’s move to extend its trading hours is in stark contrast to calls earlier in 2020 to reduce trading hours and limit the length of the working day which can see many London traders at their desk by 6.00 am and perhaps not finishing their shift until after 5.00pm.

Trading volumes tend to be concentrated around market open and closing periods and at the intersection of time zones, for example between the afternoon in Asia and the European mornings or the European afternoon and US morning sessions. It remains a moot point as to whether a shorter, more concentrated trading day would be more beneficial to users and end clients.

FX markets have long boasted of 24/5 trading and continuous liquidity but anecdotal evidence suggests that this no longer the case and that FX trading can be thin and highly volatile away from the main market hours.

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