Rate hike expectations support trading volumes

Eurex has released it’s results for the first quarter.

With further US interest rate hikes on the horizon and a looming end to
Quantitative Easing, demand for market instruments to hedge risk has been
growing strongly in the first quarter. Hedging needs are driven by open
questions – like the number of Federal Reserve rate hikes in 2017 or the
European Central Bank’s next monetary policy steps.

At Eurex, this market environment helped
bring about an overall robust result for the first quarter. Total trading
volume amounted to 446.1 million contracts over the first three months of
2017.

March saw especially strong volumes, with 190.4 million contracts traded,
an increase of 11 percent compared to March 2016.
For hedging of fixed income exposures in Euro-denominated assets Eurex has
been the trading venue of choice. Listed derivatives are a safe and efficient
way to manage interest rate risks. Eurex provides transparent pricing for
hedging needs.

This supports our trading volumes“, said Eurex CEO Thomas Book.
Eurex has seen particularly strong investor interest in French government
debt ahead of the upcoming presidential elections. Market participants rely
strongly on Futures and Options on French government bonds (OATs) to hedge these
exposures and to take a position on the market. Over the first quarter,
10.9 million Euro-OAT Futures have been traded, representing an increase of 58
percent compared to the first quarter of of last year.

Overall, the Eurex fixed income segment recorded an increase of 27 percent
in trading volumes compared to the first quarter of 2016. Demand has been
particularly strong for EURO STOXX 50 Index Options (75.4 million
contracts) and Euro-Bund Futures (55.9 million contracts).

On average, trading volumes in the Eurex equity segment have been resilient
as well, although due to significantly lower volatility, these fell short of
the exceptionally buoyant results seen in the first quarter of 2016. The first
three months of last year were characterised by exceptional volatility in
equity markets, sparked by fears of a slowdown in the Chinese economy, as
well as generally weaker expectations for corporate profits. On a year-to-year
basis, Eurex equity trading volumes recorded a drop of 24 percent from
levels seen in the same period of 2016. Despite this more challenging environment,
strong growth was recorded in Eurex’ suite of MSCI index products (plus
115%) and VSTOXX futures and options (plus 97%).