Eurex launches the first futures on a Euro High Yield Index
Volatility in the Euro high yield segment has soared as Europe gradually exits a decade of ultra-low rates environment. Inflationary pressures leading to higher borrowing costs have caused EUR HY credit spreads to widen in 2022, as financing conditions are less favorable. The surge in volatility and a higher perceived risk for the future increased the need for hedging by market participants invested in this asset class.
- Launched on 17 October 2022, the new Euro High Yield Index futures are cash-settled contracts on a Bloomberg Total Return Index denominated in Euro.
- From a risk management perspective, the product is a plain vanilla product as an index future on a Bloomberg benchmark index.
- A hybrid trading model with several committed on-screen market makers complemented by substantial off-screen liquidity.
- The product will be included in the corporate bond liquidation group and will therefore offer portfolio-margining opportunities vs. the Euro Corporate SRI Index Futures.