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Jun 27, 2016

Eurex Group

Euro-Bono-Futures: new Market Making Scheme launched

Eurex Exchange, the international derivatives marketplace of Deutsche Börse Group, is adjusting its market maker scheme for the Spanish Government 10Y Bond Future – the Euro-Bono-Futures contract (FBON), to further boost its value as a key hedging instrument.

The FBON was launched in October 2015 complementing Eurex’s existing listed long-term interest rate derivatives portfolio consisting of products such as Bund-, BTP- and OAT-Futures.

Spanish bond portfolio managers can, under current political uncertainty hedge their portfolios with the most appropriate instrument, given possible changes in the correlation between the Spanish and the Italian Government Bonds.

The amended market making scheme will have a reduced minimum quote size of 20 lots and spread size of 12 points. These measures aim to increase the on screen and off-book liquidity and allow all participants, to hedge their Spanish bond portfolios in case of a disruption or correlation break with the other non-core bond futures listed on Eurex.

In addition to existing market makers, further key Spanish banks and brokers are actively supporting and trading the FBON. Bankinter will be providing interbank block trade prices, while key Spanish brokers such as Ahorro Corporación, CIMD, CM Capital Markets and Altura Markets are committed to find the best prices available for blocks.

“We are keen to support the block trade offering and act as liquidity provider,” said Ignacio Blanco Esteban, Head of Trading at Bankinter” 

“The new market making scheme is designed to further boost on screen and off-book liquidity of the BONO and allow participants to hedge their risk also in very volatile market conditions,” said Mehtap Dinc, member of the Eurex Executive Board, responsible for Global Derivatives Product Development.

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