Eurex reports 9 percent drop in May’s trading volume

abdelaziz Fathi

Europe’s leading derivatives exchange, Eurex, has released its trading volume figures for May, indicating a 9 percent decrease in total trading volume compared to the same month last year.

The total number of contracts traded stood at 142.5 million, down from 156.5 million contracts in May 2022.

Among the various categories, interest rate derivatives experienced an 8 percent decline, with 55.5 million contracts traded in May compared to 60.1 million contracts the previous year. Index derivatives also saw a decrease of 13 percent, from 71.7 million contracts to 62.2 million contracts traded. However, equity derivatives trading remained unchanged, maintaining a level of 24.6 million contracts, the same as May 2022.

Despite the overall decline in trading volume, Eurex’s OTC Clearing segment showed positive growth. Notably, overnight index swaps reported a robust performance, with a 55 percent increase in notional outstanding to EUR 2,933 billion in May compared to the previous year. Average daily cleared volumes for overnight index swaps also saw a substantial rise of 117 percent to EUR 13 billion over the same period. Moreover, the total notional outstanding across all OTC Clearing products increased by 27 percent to reach EUR 34,051 billion.

In the realm of secured funding and financing, Eurex Repo, the electronic market operated by Eurex, witnessed a significant surge in daily GC Pooling volumes in May. The volume rose by an impressive 142 percent to EUR 187.8 billion. Furthermore, the average daily volume in the Repo market increased by 74 percent, reaching EUR 209.5 billion. The total average daily term-adjusted volume experienced a remarkable growth of 101 percent in May.

The Eurex FX offering of classic FX futures and options, in combination with the rolling spot futures, allows traders to manage their FX exposures with listed products.

The pan-European exchange has made efforts over the past year to expand its FX trading business, most recently signing major banks to support their FX futures, from clearing to trading.

Eurex’s currency trading desk currently offers various FX derivatives products, including FX futures available in 19 currency pairs, all with quotation and tick sizes in-line with existing OTC FX standards. A liquidity scheme caters for tight pricing and competitive liquidity, it says.

However, London remains the pre-eminent in FX and OTC derivatives, which are used by investors to hedge their portfolios, but market participants are concerned that the Brexit deal will cause disruption in the cross-border derivatives market.

Recently, Deutsche Börse’s derivatives-focused exchange launched a new program to incentivize clients running active accounts in the EU. Eurex’s profit sharing scheme continues to win clearing business from rivals in the UK even as the battle for euro-clearing continues. Since Britain fully left the EU in December, clearing euro derivatives has become a Brexit battle as Brussels seeks to build up the bloc’s own capital market and end reliance on London.

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