This summer, Eurex’s unique FX solution received the “Best exchange for FX” award at the 2021 FX Markets e-FX Awards. Together, Eurex and 360T combine unparalleled OTC and on-exchange FX trading and clearing capabilities under the Deutsche Börse umbrella. Our Global Head of FX Derivatives, Jens Quiram, explains how listed FX derivatives linked with central clearing allow the buy-side to manage AANA exposures to remain out of scope for UMR.
Uncleared Margin Rules and FX: Eurex offers solutions to a complex affair
With Phase 5 of the Uncleared Margin Rules (UMR) in effect, the market focus shifts to Phase 6, scheduled for September 2022. This may drive further buy-side demand for FX futures and OTC FX clearing as these viable alternatives remove transactions from your AANA calculation. However, UMR and FX is a complex story.
The monthly average market shares for FX Futures in major EUR currency pairs (GBP, USD, JPY, CHF) traded on Eurex continue to expand, hitting peaks of 17% as seen in EUR/JPY. In September 2021, traded volumes are up more than 21% compared to September 2020. Overall Q3 2021 shows an uptick of more than 44% compared to Q3 2020. The total traded contracts approached 500k YTD, keeping the segment well on track to outperform 2020.
USD/KRW volumes have continued to grow since its launch at the end of July, with more than 90,000 contracts traded until 25 October. The product has become a crucial source of price discovery outside the Korean market opening hours. The ADV on Eurex already stands at 1,350 contracts.
All types of clients, such as Takers, Liquidity Providers and Clearing Members, continue to onboard to Eurex FX. Currently, more than 20 participants are in admission.
Eurex launches deliverable cross currency swaps and OTC FX clearing
Following successful testing, Eurex Clearing went live with its clearing service for deliverable cross currency swaps and OTC FX. Commerzbank has joined J.P. Morgan and Morgan Stanley as Clearing Members to complete the testing and enable the go-live of the service.
Subject to regulatory approval, Eurex will offer clearing of the most liquid Non-Deliverable Forwards (NDF) currency pairs by Q4 2021: non-deliverable USD/BRL, USD/KRW, USD/INR, USD/TWD, USD/CLP and USD/IDR.
We would like to draw your attention to the opportunity to test the upcoming NDF clearing service in our simulation environment: Starting 1 November 2021, clearing of NDFs will be available in simulation for both inter-dealer and clients trades with cash settlement in USD.
Read more on the efficiencies that Eurex Clearing brings.
Market Data + Services provides 360T FX Spot and Swaps data
The offer provides a comprehensive view of the FX spot market across the industry and makes FX swaps market data available from +20 contributors. It covers over 40 currency pairs across G10, EM and NDF, including standard tenors, turn dates plus IMM and special dates (composite rates in executable quality).
The data is available via Deutsche Börse’s market data feed CEF or from data vendors. If you are interested in sample data or would like further information, please contact julia.bahr@deutsche-boerse.com or read more on the website of Deutsche Börse Market Data + Services
Further trading opportunities: first FX futures on the Eurex/KRX Link
The new product listing of the U.S. Dollar/Korean Won futures tradable via the Eurex/KRX Link presents an excellent opportunity to discuss new products and the Korean market.
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