New Milestones Achieved in Eurex’s Futures on French Government Bonds
The international derivatives market Eurex Exchange has set several new records in its Euro-OAT Futures.
In August 2012, open interest exceeded for the first time the 100,000 threshold with 104,869 contracts. Trading volume in July also set a new record, both in average daily volume with about 19,600 contracts and in total with 431,000 contracts.
Total volume since launch is close to 1.5 million contracts. The OAT futures were launched on 16 April and are based on the notional long-term bonds issued by the French Republic (Obligations Assimilables du Trésor – OAT).
Since launch, more than 150 Eurex customers have traded the new futures. Liquidity is supported by several market makers, among them Morgan Stanley and Natixis. The majority of trading takes place via the order book, however a significant portion of the overall volume comes from bilaterally agreed block and exchange for physical (EFP) trades which can be entered into the Eurex Clearing system and use Eurex Clearing as central counterparty.
“We are pleased to have played a part in the successful launch of the FOAT contract and contributed to its new record volumes. Natixis has partnered with Eurex and been a market maker in the contract from birth. This new instrument has served to enhance our global distribution capabilities and provide creative strategies for our valued customer base”, said Nicolas Truong, Global Head of Rates, Natixis.
“We are delighted but not surprised by the success of Eurex’s OAT Futures. Investors, hedgers and arbitrageurs alike have warmed to this overdue addition to the spectrum of product available in European sovereign markets. As a leading primary dealer we were delighted to act as committed market-maker of this new future and to support both Eurex with the launch and development of this product, and the promotion of liquidity in French government debt,” said Ciaran O’Flynn, Co-Head of European Government Bond Trading at Morgan Stanley.
“Our latest interest rate future has proven its value to our customers and the investment community within weeks. It offers them a more precise hedging solution as well as new opportunities in spread trading with our German and Italian interest rate futures,” said Mehtap Dinc, Head of Product Development, Eurex.
The Euro OAT Future extends the existing offering of benchmark futures on German government bonds (Buxl, Bund, Bobl and Schatz futures) and the short-, medium- and long-term futures on Italian government bonds (Euro BTP Futures) launched between 2009 and 2011.