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Several major benchmarks hit record highs in February in a benign volatility regime. However, there was a rather more precipitous increase for U.S. treasury yields, which caused a pare back of some of those equity market gains towards the end of the month. While the like-for-like comparison of volumes was anticipated to be lower due to the one-off pandemic impacts last year, there was still volume growth in the MSCI derivatives segment, with EM Asia being the most active regional futures contract, along with many other closely related countries seeing volume leaps: China, Taiwan, Thailand, Malaysia, India, Malaysia and Indonesia. The other important Asia-focused contract, KOSPI 200 futures were impressively active also.
The reduction in the R-infection rate combined with the vaccination rollout programs has made a full reopening of the global economy in H2 more likely. This potential reopening is accompanied by expectations of more global trade and rising prices, such as the continued upward trend in oil prices and some other commodities. This may go some way to explain why there was solid interest in our Oil & Gas sector options. The specter of inflation responsible for the bond yield increase also sees renewed bets placed on European company dividends; here, the EURO STOXX 50® index dividend options were in focus.
I would conclude by mentioning one final stand-out statistic for the STOXX® Europe 600 ESG-X index, which recorded options volumes of over 100,000 contracts in February. To see concrete evidence of the existing ESG index futures volumes now expanding into the respective ESG index options market validates just how strong this investment trend remains. We expect to add to the already announced product launches by further growing our important ESG segment in the coming months.
Zubin Ramdarshan, Head of Equity & Index Product Design, Eurex
