Jul 07, 2023
Eurex
Equity Index market briefing July 2023
Q2 volumes saw notable hotspots in MSCI futures with strong increases versus the same quarterly period of last year
The markets navigated the US debt ceiling scare relatively unhindered in Q2. For sure, the artificial intelligence frenzy is responsible for an ever-concentrated number of technology stock winners driving the benchmark index performance globally. However, the broader market still reflects caution as central banks press on with interest rate increases aimed at reigning in stubborn inflation.
Despite the market generally grinding higher, resulting in lower realized volatility, Eurex volumes saw notable hotspots. MSCI EM Asia, EM EMEA, Japan, India, Europe, EM, Australia, Canada and USA futures all saw strong increases versus the same quarterly period of last year. We observed a similarly healthy picture in the MSCI World options. We also saw relatively higher activity levels in dividend-related products, such as Select Dividend 30 futures, Banks index dividend futures and Euro STOXX 50 index dividend options.
Even though ESG investing recently attracted some negative press coverage, volumes for our EURO STOXX 50® ESG futures and options and the STOXX® Europe 600 ESG-X options show strong growth. It seems that participants reduced hedging with futures in favor of increasing options hedging. Evidence of this were volume upticks in DAX, VSTOXX®, SMI and STOXX® 600 options not mirrored in the corresponding futures.
A strong pipeline of new product launches across Q2 saw the daily settled futures for single-name option volatility strategies going live. At the same time, we started offering the MSCI market-on-close functionality. We also completed the much-anticipated consolidation of weekly expiring options into the regular product groups under the NextGenETD project. Furthermore, we added additional MSCI futures and options to extend this successful segment and the FTSE Bitcoin USD and EUR index futures also started trading. Looking ahead to Q3, the schedule of new product launches and liquidity measures will give us many reasons to reach out to our clients in the coming weeks.
