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The international trading platform Eurex Bonds plans to make its system even more attractive in 2007: with a new fee model, the launch of numerous technical enhancements and a massive expansion of the product range. The new Eurex Bonds fee model came into force in January 2007 and increases the monetary incentive for voluntary provision of liquidity. The launch of Xetra Release 8 in April 2007 will primarily bring the implementation of performance enhancement measures designed to maintain processing times even when transaction volumes are 5-10 times higher. The expansion of network bandwidth back in December 2006 already cut order processing time by around 50 percent. Furthermore, the heartbeat function will provide additional, technically supported hedging against risk for market makers. The product range will also be expanded to include European Treasury Bills and floating rate notes, and the platform aims to add more trading participants.
The Eurex Bonds product portfolio already saw steady growth in 2006: the new “European Government Benchmark Bonds” segment was introduced in July, adding benchmark bonds from Belgium, Finland, France, Greece, Ireland, Italy, Portugal and Spain alongside the government bonds offered from Austria and the Netherlands. This was followed in November 2006 by the launch of the “Euro Zone Government Linker” segment, which currently includes inflation-indexed government bonds from Germany, France, Greece and Italy. The number of tradable products rose in 2006 by a total of 41 percent to 544 instruments.
Full year trading volume and participant numbers for Eurex Bonds in 2006 saw a moderate year-on-year growth: volume increased to €151.3 billion (single counting); beating out the €149.3 billion turned over in 2005. Average daily volume in 2006 was thus €593 million, peaking at €704 million in November. Turnover in German government bonds rose by 9 percent to €120.9 billion (2005: €111.2 billion). The greatest percentage growth was recorded in the “Covered Bonds” and “European Government Benchmark Bonds” segments. The admission of Banc of America Securities Ltd. as a new participant in October brings the total number of participants to 33.
