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Equities rallied broadly in November under subdued realized volatility. The U.K. heads into a highly unpredictable general election while a possible U.S./China trade agreement creates some positive sentiment. The relatively benign market conditions meant some products saw diminished trading opportunities. This was, however, balanced by activity across other Eurex segments.
The Banks sector index derivatives and Banks index dividend futures all saw volume increases attributable to divergent views on the sector's future dividend yields. The five-year index dividend suggests a significant discount on historical dividends paid. One driver here is structured products issuance, while the other is differing confidence levels over the capability for Eurozone banks to maintain current dividend pay-out levels. We have also seen this trading pattern in our single stock dividend futures where Intesa Sanpaolo was very active. Elsewhere, the iShares physical Gold ETF options were heavily traded, driven mainly by the rolling of positions into the next expiry month. MSCI futures volume was up significantly compared to last year. Overall open interest in MSCI products is up more than 36 percent compared to 2018. November saw strong volumes in MSCI EM Asia, Europe and EM futures with the MSCI World options being equally busy. There was also some early Dec-Mar roll trading for EM and EM Asia which supported this robust positive volume trend.
In November, we have seen over 45,000 contracts traded in our ESG offering, with the STOXX® Europe 600 ESG-X futures contributing most with over 42,000 contracts. The newly introduced contracts in October, namely the STOXX® Europe ESG Leaders Select 30 futures and the STOXX® Europe 600 ESG-X options, both saw extremely encouraging early volume print. December is expected to be a busy month. Not only for the anticipated futures roll and year-end, but also as market participants navigate some potential volatility-inducing events.
Zubin Ramdarshan, Head of Equity & Index Product Design, Eurex