06 Oct 2021


Equity Index market briefing October 2021

In the future, we may remember Q3 2021 as an inflection point for global markets. China showed the most volatile example of this, with a politically led crackdown on the technology, educational and digital sectors. The subsequent problems at Evergrande only exacerbated the already highly negative investor sentiment. Concerns around inflation became most evident recently with the violent upward spike in natural gas and other power markets. The market also had to come to terms with the end of central bank policy, shifting away from accommodative support, resulting in rising yields.

In Q3, Eurex followed up on a vibrant year of new product launches with the new Bitcoin ETN futures and MSCI Brazil futures. We also transitioned to the new DAX 40, with its enhanced inclusion criteria and the expansion of the components. This coincided with robust mini-DAX and micro-DAX futures volumes over the quarter. The VSTOXX®, Banks sector, Oil & Gas sector and EURO STOXX 50® index dividend futures and options also recorded strong volume growth.

Other highlights were the volume and open interest records for the STOXX® Europe ESG-X futures and options. While the ESG-X contract remains the global leader in ESG index derivatives, we already see promising volumes across several other ESG flavors. The other notable positive story was visible in Eurex’s MSCI derivative suite.  Once again, the combination of excellent liquidity across both MSCI global, regional and country futures and options reached an increasing audience and user base.

The importance of Eurex’s range of index and total return futures product solutions has gained focus as the buy side made their preparations for UMR phase 5 -live since September- and gears up for the final phase (6), which is on the horizon next year. To best serve this expanding listed derivative community, our attention in the final quarter will be on ensuring the excellent liquidity provision picture continues into 2022.

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