Eurex clears first FX swaps from JP Morgan and Morgan Stanley

The two US banks were the first to act as clearing participants for Eurex Clearing’s OTC FX clearing service.

Eurex Clearing has said it has cleared its first cross-currency swap transactions, as its parent company, Deutsche Börse, continues to build out its FX trading services via the clearinghouse and trading platform 360T.

JP Morgan and Morgan Stanley were among the first institutions to act as over the counter (OTC) FX clearing participants at Eurex, with the service currently offering interdealer clearing of EUR/USD and GBP/USD cross-currency swaps with up to 50 years’ maturity.

“Cross currency swaps play an important role in the flow of capital through the international markets,” JP Morgan’s head of rates, fixed income financing and credit portfolio trading, Charles Bristow, commented.

“Moving to a centrally cleared model is a significant moment for the asset class as it reduces the complexity linked to large bilateral counterparty exposures, enhances resource efficiency and increases overall marketplace resilience.”

Eurex Clearing’s CEO, Erik Müller, added that with the completion of the first cross-currency swaps transaction with JP Morgan and Morgan Stanley, Eurex is looking to deliver greater efficiencies to the FX market.

“Clients will benefit from significant capital relief and cost savings when centrally clearing their OTC FX exposures. Our objective is to build a cleared FX liquidity pool over time, as further clients decide to utilise our new FX clearing services,” Müller added.

Eurex Clearing also offers clearing in FX spot, FX forwards and FX swaps of up to two years maturity, which can be executed on 360T. It also plans to extend the OTC FX clearing service next year with the launch of client clearing.

“We appreciate the benefits that post-trade novation of risk can bring in terms of credit and risk optimisation. We are therefore happy to lead the way for cross currency and FX markets by using the Eurex FX clearing service,” said Andrew Millward, head of rates and FXEM, EMEA, Morgan Stanley.