Overall, the positive trend in increasing term and average traded volumes continued in April, with term business growing by 47.4% versus April 2021, driven by a 75.3% rise in GC & Special Repo, according to Frank Gast, managing director at Eurex Repo.
He noted that:
Traded volumes rose even stronger in April, with GC & Special up by 112% compared to April 2021. Even GC Pooling was slightly up by almost 3%. This increase marks the first time in a while that GC Pooling average trading volumes have risen as the market is still under pressure by substantial excess liquidity.
Meanwhile, term business in GC Pooling has continued growing since Q4-2021 and currently is well supported by an expected rate hike and hence a steeper interest rate curve. Since July, after several ECB officials opened the door for a rate hike, we have seen 1yr GC Pooling trades rising close to 0% (traded at -0.01% on Friday 29 April), the highest level in years.
Trading volumes in Bund Special repos increased by 75% for the period Jan-Apr 2022 versus 2021, mainly due to the strong demand for Bunds in the repo market. EU/NGEU bonds continued to be the most traded issuer in the SSA segment, with average daily volumes 10% higher than in March. Overall, the EU/NGEU trading volumes in April 2022 were 122% higher than the 2021 monthly average.