02 Nov 2020

Eurex

Equity Index market briefing November 2020


October witnessed the worst weekly performance since March as U.S. technology stocks retraced aggressively, bringing with it an uptick in volatility. The backdrop of renewed restrictions on social gatherings, travel and the hospitality sector also brought anxiety of weak levels in economic activity and the knock-on impact to Eurozone GDP.

Looking at Eurex volumes for the month of October, naturally we have seen strong hedging and position taking in the VSTOXX® options ahead of the election count. Other volume highlights saw the EURO STOXX® month end options post record volumes and with the launch of the new semi-annual June expiries, EURO STOXX 50® index dividend options saw high levels of trading interest again. This was also reflected in a jump in volume in the related Banks index dividend futures as some European financials examined the possibility to pay shareholders cash dividends again. On the index futures, the Mini-DAX® was particularly robust along with the Total Return Futures. The good volumes seen in September for our MSCI derivatives segment continued into October most notably in EM Asia and World.

The other new interesting trend that develops is a focus on our MSCI EM ESG screened futures where some block activity was observed in October and currently open interest stands at over EUR 120m notional. We expect that the statement from Joe Biden that the U.S. plans to re-join the Paris climate agreement, will act as a strong catalyst for trading volumes across our ESG segment. Here Eurex offers clients a wide range of ESG index futures and options to address the anticipated demand increase.

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

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