04 Nov 2021

Eurex

Equity Index market briefing November 2021


Global equity markets hit new highs as earnings season kicked off in the U.S. with generally positive surprises. Except for natural gas, which was overdue a normalization, commodity prices overall rose, including gold. This past month, the main area of action was in the fixed income market, where unwinding in crowded U.S. yield curve strategies created some volatility. Closer to home, the German elections seem to deliver a centrist coalition government and all eyes are currently on world leaders and their statements coming out of the COP26 in Glasgow.

Eurex volumes were strong across several products and compared favorably to October last year with solid growth for STOXX® Europe 600, VSTOXX® and EURO STOXX 50® Total Return Futures. With crude oil maintaining its upwards trend, the Oil & Gas sector futures were very active. The established products were not the only ones faring well; the new Micro-DAX® Futures traded over 370k contracts last month. There was also heavy use of our EURO STOXX 50® month-end options. The other prominent volume success is the MSCI index options. MSCI World, EM and EAFE options were all active, lending further support to the respective MSCI index futures markets at Eurex, where participants can benefit from optimized margin treatment across all their benchmark index positions.

A key new product was added to our expanding ESG segment, namely the EURO STOXX 50® ESG weekly index options, providing clients the choice to execute options strategies over a shorter maturity horizon. We also introduced several single stock derivatives to cover newly listed IPOs across the European technology sector. As we move to year-end, participants already look towards their equity market positioning going into next year. We expect that this will fuel the demand for hedging needs in the last two months of 2021.
 

Zubin Ramdarshan, Head of Equity & Index Product Design, Eurex