Eurex, Europe’s largest derivatives exchange, says it has reached another important strategic milestone. It says it has become the only exchange that offers futures and options on all major MSCI indices.
This follows the launch of futures and options on the MSCI EAFE index that represents the developed markets of Europe, Australasia and the Far East. Deutsche Börse notes that this is the leading benchmark for American investors, seeking international equity performance.
The introduction of futures on the EURO STOXX 50 Corporate Bond Index enables Eurex to claim to be the first mover offering an exchange-traded market for the corporate bond segment in Europe.
Meeting market needs
Eurex says the new products meet the market’s needs, especially those of the buy-side whose investment behaviour is undergoing structural changes as passive products such as exchange-traded funds (ETF) are gaining momentum.
This affects the derivatives markets because it creates new hedging needs for asset managers, said Thomas Book, Eurex chief executive officer and head of derivatives markets trading at Deutsche Börse Group.
“We aspire to become the leading derivatives exchange for global and broad based indices,” he said. “The latest launches and record volumes in our MSCI segment show that we are on the right track.”
Thomas Book, photo courtesy of Eurex
It adds that 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.
“The European market for corporate bonds plays a key role in the financial ecosystem,” said Mehtap Dinc, Deutsche Börse head of derivatives product development. It has grown consistently since the global financial crisis, he added.
“With more providers of MSCI-related vehicles and growing competition on pricing these, an increased need for cost-effective and efficient hedging tools in the form of futures and options arises,” Dinc said.
The latest trading statistics produced by Eurex saw a record in the MSCI segment: June saw more than 1.8 million traded contracts – a plus of 114% compared to June 2016. Also, market participants once again relied on the Eurex fixed income suite of products (+6%).
On the clearing side, Eurex says it noted strong demand for its EurexOTC Clear services. The notional outstanding reached €1.5trn.