Nowhere to hide...

Looking at the charts for Q3, there were very few places to hide. Since the end of July -except for the USD and Crude Oil- equity benchmarks retraced, as did fixed income markets. Even the gold price was not immune. One default scenario being discussed among investors is the prospect of global interest rates remaining at current levels as inflation remains somewhat stubborn. With some of the gains this year evaporating, an increased demand for hedging was evident across several Eurex segments. The core EURO STOXX 50?, DAX?, SMI?, STOXX? Europe 600 and Select Dividend 30 index options all had volume growth versus the previous quarter. Among the satellite products, VSTOXX? and EURO STOXX 50? index dividend options also saw strong volumes. The interest on the futures side was more diverse, with the largest percentage volume increases seen for STOXX? Europe 600, Mini-DAX?, MSCI EM Asia, Select Dividend 30, MSCI China, STOXX? Europe ESG-X, Banks index dividend futures and STOXX? Europe 600 Real Estate futures.

For the newly launched products, the highlights for the third quarter included c.50k contracts traded in FTSE Bitcoin index futures and 360k for the EURO STOXX 50? daily and month-end options. The Monday-expiring KOSPI 200 index options had a successful start, and we recorded the first trades in the new SEK single-stock option segment. The Basket TRF segment reached a significant milestone with EUR 15bn notional trading up to the end of Q3, already exceeding the entire 2022.

Q4’s outlook points towards increased volatility. The US ‘magnificent seven’ technology stocks show signs of weakness, and a small but vocal number of high-profile investors have predicted a broad equity market downturn. Coupled with the looming US government shutdown, hedging demand remains in focus across our suite of highly liquid STOXX?, MSCI and FTSE benchmark index derivatives at Eurex.