EURIBOR TRADING ACTIVITY INCREASES

Coming in to 2016, the consensus call was that the Euro would weaken further against the U.S. Dollar, a continuation of a trend that finds it origins back in 2012 when Mario Draghi stated “the ECB is ready to do whatever it takes to preserve Europe.”

Financial markets have begun the year in a ‘risk off’ tone, with participants questioning whether something more pernicious is on the horizon. We've seen a stronger-than-expected Euro, in part due to the negative risk sentiment causing crosswinds in currency markets.

With the Bank of Japan joining the negative interest rate policy (NIRP) club this year, the European Central Bank (ECB) was in the spotlight again this week. The ECB implied earlier in the year that it's ready to take further action; Draghi noted at the January ECB meeting "[the ECB] will review and possibly reconsider our monetary policy stance at our next meeting in early March.”

“The March ECB meeting was an important meeting for global interest rate markets, and we're seeing that reflected in trading activity. The ICE Euribor complex has experienced strong trading activity year to date, particularly in options where calls have been more traded than puts. We’ve seen increased liquidity and more trading opportunities in 2016, particularly leading up to and following the ECB’s monetary policy remarks,” says Chris Rhodes, Global Head of Interest Rates at ICE.

Euribor Future ADV & OI

Euribor Option ADV & OI



ICE EURIBOR FUTURES VOLUME

+81% ADV
From Feb. 2015 to Feb. 2016


ICE EURIBOR OPTIONS VOLUME

+334% ADV
From Feb. 2015 to Feb. 2016


ICE EURIBOR FUTURES OPEN INTEREST

+18% OI
From Feb. 2015 to Feb. 2016


ICE EURIBOR OPTIONS OPEN INTEREST

+90% OI
From Feb. 2015 to Feb. 2016