Eurex has revealed further details of its upcoming product range, which will include swap and repo futures due to launch at the end of the summer.
Last month, the Deutsche Börse-owned derivatives exchange said it would launch FX futures and options and swap futures products to respond to client appetite to trade a broader range of asset classes on Eurex and alternatives to OTC derivatives.
The FX products will launch on 7 July focusing on euros, dollars, Swiss francs and British sterling with a standardised contract size of 100,000 in the given currency. It will offer physical settlement via the Continuous Link Settlement system, with clearing provided by Eurex Clearing.
Stuart Heath, executive director and head of Eurex’s representative office in the UK, said the group hopes its FX products will bring several innovations it believes will be popular with customers. While the futures market for FX has become crowded, he said the addition of FX options alongside equivalent futures will provide further choice and hedge opportunities for market participants.
Additionally, settlement will always occur on a Friday, avoiding potential complications from settlement that occurs over the weekend.
"We want to keep the experience as simple as possible for our customers while making sure that we always remain the counterparty," said Heath
However, its swap futures offering, which will consist of two products launching during September, is set to be a particular game changer for the group, according to Heath.
A euro swap future will launch on 1 September, two-, five-, 10- and 30-year maturities. The development of a 30-year swap future product gives Eurex coverage of the whole euro yield curve, meaning market participants will be able to benefit from cross-margining on many of their core hedges.
The derivatives exchange will also launch a repo future based on its GC Pooling repo market on 10 September.
Heath said these products will be particularly popular with corporates and institutional investors as regulatory reforms to OTC derivatives trading in the European market infrastructure regulation that will require central clearing of swaps are likely to leave some firms unable to use swaps.
"We're looking at what the market needs and there are a lot of firms that don't have access to clearing in Europe,” explained Heath. “Most of the big clearing banks are likely to focus on their top 300 clients and swap futures will provide an alternative to those who would otherwise be left out."