Derivatives exchange Eurex is expanding its interest rate segment with the launch of three-month Euro STR futures referencing €STR.
Eurex claims that the launch is an important milestone in both the establishment of the €STR as the new benchmark risk-free rate, and in expanding the exchange’s EUR-denominated fixed income product offering.
The launch of the new futures will allow Eurex to offer a listed, centrally cleared and cash-settled solution for trading or hedging the new risk-free rate.
The contracts are based on the compounded €ST over a three-month period and will be available for trading on Eurex from 23 January next year.
“Launching three-month Euro STR Futures is a natural extension of our product portfolio given our liquidity in the long-term interest rate segment,” said Lee Bartholomew, global head of derivatives product R&D fixed income and FX at Eurex.
“It underlines our commitment to be the home of the Euro yield curve and delivering maximum margin and capital efficiencies to the market. Additionally, further product extensions are likely as the market evolves.”
Last month, Eurex began to offer market participants the ability to hedge the Euro-denominated high-yield corporate bond market in Europe with the launch of Euro high yield index futures. The new contracts allow market participants to take advantage of the increased volatility of Euro-denominated sub-investment grade securities.
Elsewhere, Eurex added emerging markets currencies to its FX futures offering, covering Brazil, Mexico and South Africa.