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On the recent fixed income high, Eurex’s corporate bond index futures and other innovations

Release date: 09 Mar 2018 | Eurex Exchange

On the recent fixed income high, Eurex’s corporate bond index futures and other innovations

Eurex continues to innovate to meet the hedging needs of investors around the globe. The high demand is also reflected in the recent all-time high on 6 March, when 9.8 million fixed income contracts have been traded. In addition, February marked another milestone. The EURO STOXX 50® Corporate Bond Index Futures is now available for direct access in the United States. It is the first time, the U.S. Commodity Futures Trading Commission certified a debt security index future.

The EURO STOXX 50® Corporate Bond Index is the only index that tracks the performance of euro-denominated, investment grade corporate bonds of the EURO STOXX 50® constituents. By introducing futures on the index, Eurex was the first mover offering an exchange traded market for the corporate bond segment in Europe. The product enables market participants to hedge and trade market expectations in the corporate segment. This is of special importance in light of the changing interest rate environment. Therefore, Eurex expects growing demand for its futures in the months to come.

Another innovation that supports market participants in the context of the elections in Italy are BTP options. Prior to the listing at Eurex, these instruments were only available as OTC products to a subset of investors. BTP options extend hedging and trading opportunities by making the volatility in the long-term maturity range of the Italian interest rate curve tradable. Since the launch in October 2017, turnover was at 210,000 contracts. ADV in February was nearly 3,500.

A third area where Eurex innovates to support market participants in their fixed income business are fixed income ETF options. The exchange is the only European exchange offering these instruments, which were launched on 20 Nov. 2017 based on three iShares ETFs. So far, 11,300 contracts were traded.

Overall, February trading volumes at Eurex were at 170.9 million traded contracts.