Eurex Clearing continues to receive broad market support for its Partnership Program. So far, 29 market participants from the US, the UK, Asia and Continental Europe have joined the program to back the joint objective of building a liquid alternative to clear Euro-denominated OTC interest rate derivatives in the EU27.
In June 2018, average daily cleared volume in interest rate derivatives increased to €67 billion from €8 billion last June. Notional outstanding stood at €7.2 trillion compared to €1.5 trillion end of June 2017. This means that Eurex Clearing now holds a market share of roughly 8 percent in the global Euro-denominated interest rate derivatives market.
There is no evidence for the concern that a fragmentation of the existing liquidity pool would lead to significant cost increases in particular for EU27 buy-side firms. For almost all relevant tenors, 19 banks supply quotes on request via Tradeweb and/or Bloomberg, and eleven banks currently actively stream live prices on the platforms largely at the same bid/offer spread and size as LCH.
“Our initial objective was to build liquidity in the dealer to dealer segment and motivate banks to provide attractive pricing to end clients,” says Matthias Graulich, Member of the Eurex Clearing Board. “Based on the excellent price quality now available to the buy side we will put a strong focus on activating and on-boarding more buy-side clients in the coming months.”