Eurex’s Euro-EU bond futures (FBEUs) are now available for trading.
The instruments, which were first announced in April, provide a physically deliverable futures contract designed to hedge EU exposure.
READ MORE: Eurex launches EU bond futures
Eurex stated that the contracts complement its existing European govie futures offerings and could facilitate spread-trading strategies such as block or basis trading when used with its Trade Entry Services (TES).
In a research note last week, Morgan Stanley shared that it saw potential for EU futures contract growth in the near future.
Analysts Maria Chiara Russo, Luca Salford and Lorenzo Testa believed that Eurex’s new product could be a more effective hedging tool for sovereign, supranational and agency (SSA) bond exposure compared to existing tools.
Matthias Graulich, a member of Eurex’s executive board, commented, “We’ve seen overwhelming interest from a broad spectrum of investors, including real money accounts, hedge funds, and the sell-side, all eager to use this new instrument.
“This strong demand underscores the market’s need for efficient tools to manage exposure to EU debt and further strengthens the EU’s position as a prominent issuer.”
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