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Equity Index Market Briefs
Equity Index Highlights - June 2019 edition
May marked a retracement of broad equities, coming after a strong rally to start the year, thus confirming technical analyst calls that markets have formed a double top reversal pattern. The U.S. president has renewed his global trade war with China and more recently also Mexico, taking markets by surprise and thus triggering an acceleration of the sell-off towards the end of the month. Members were able to rely on Eurex’s deep markets during this volatile period to source superior liquidity; we saw record volumes in our VSTOXX? futures and options, often the go-to hedge instrument in times of rising uncertainty.
Another product range in focus, once again, were our MSCI derivatives. Here, for the first-time, open interest reached 2.7m contracts outside of a roll period. The latest addition to this suite is MSCI Saudi Arabia. Here Eurex moved swiftly in response to customer demand to list this new futures contract ahead of important EM inclusion dates. Record monthly volumes of 343,000 contracts for our Total Return Futures came on the back of large moves in the front end of the curve with the June expiry declining from a high of 110bps to less than 20bps. Potentially more interesting is that the September expiry is trading close to zero, suggesting short position demand for European blue-chips as we approach the end of the year.
The month of May also saw the rollout of EnLight across our equity and index derivatives. Here we saw early EURO STOXX 50? Index option RFQs resulting in trades being executed. It is encouraging that members continue to adopt this new price discovery service. Given that the current trading environment is more difficult to navigate due to elevated volatility levels, this enhancement to source block trading liquidity via RFQ was particularly well-timed.
Zubin Ramdarshan, Head of Equity & Index Product Design, Eurex
Facts & figures
Eurex achieves half a billion euros of outstanding Open interest in its ESG derivatives?
For the first time, Eurex has exceeded an outstanding Open interest of half a billion euros in its ESG Futures. Open interest on 6 June amounted to EUR 564 million or 40,640 contracts, respectively. In total, more than 94,000 contracts have been traded since their launch in February. Almost 60 percent of the volume comes from end clients.
Our ESG futures get CTFC approval
In February we have launched the first index futures on a number environmental, social and governance (ESG) versions of selected benchmark indices from STOXX?. The growth of ESG investing has created demand for sophisticated or diversified index concepts that move away from existing benchmarks and derivatives to versions that reflect sustainability factors. But what is the trend in other markets and what opportunities exist in the U.S. now that CTFC approval has been achieved?
Three reasons to consider MSCI Saudi Arabia Index Futures from Eurex?
On 20 May Eurex launched MSCI Saudi Arabia Index Futures. We spoke to Ralf Huesmann, Senior Expert, Equity & Index Strategy and Product Design, about the product launch and the reasons behind it.
Worth reading: How climate change will affect the banking sector
“Banking in a changing climate – preparing for what lies ahead” is the title of an article published in the European Central Bank Newsletter in May 2019. The authors describe how climate change affects the banking sector and what banks do to be prepared for the challenges ahead. What risks are implied and how can one ensure sustainable development? The article also features the initiatives started in this field.
Derivatives Forum Amsterdam & Paris: Register now!?
Impact investing, technological advancements, regulation and geopolitical developments are rapidly changing our industry. We will touch on this paradigm shift at our Derivatives Forum 2019. Topics of discussions are changing market structures, the impact of ESG and the evolution of the European financial markets landscape. Register now to join us us in Amsterdam on 13 June and in Paris on 25 June!
Webinar: A buyside perspective - ESG Derivatives
The massive growth of ESG investing has created demand for sophisticated and diversified index trading concepts. In a one-hour webinar, Eurex and asset managers will discuss the most popular types of ESG investments, the role of ESG derivatives, the cost of trading and major future developments. Register now to join us on 26 June!
IDX 2019 wrap-up: Making markets fairer, safer and more stable
From market structures to central clearing to ESG: the agenda of FIA’s International Derivatives Expo (IDX
) 2019, which took place from 4 to 5 June at The Brewery in London, was packed with topics catching the attention of the industry.
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