Interest rate derivatives take another hit in July

Interest rate trading on Europe’s two biggest platforms fell significantly during July, as this year’s slump in activity continues in the major asset class.

Interest rate trading on Europe’s two biggest platforms fell significantly during July, as this year’s slump in activity continues in the major asset class.

NYSE Liffe’s short-term interest rate derivatives saw the biggest decline, with activity dipping below one million contracts a day on average, down 56% compared with July 2013.

Eurex also saw its interest rate segment decline 22% during the month.

With Europe’s interest rates remaining flat, with little indication of the rates moving, trading has slowed dramatically across the continent.

Interdealer brokers (IDBs) ICAP and Tullett Prebon also reported major declines in trading throughout the first half of this year.

Tullett’s revenue slide, from £93 million to £70 million, was followed by news that it would cut 210 jobs across its front and back office.

The IDB blamed regulatory uncertainty and a lack of volatility in interest rates.

ICAP’s global banking division revenue also fell by 19% as a result of the market conditions.

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