Eurex partners with several banks to strengthen USD clearing service

Eurex is partnering with several banks including Deutsche Bank, JP Morgan and LBBW to strengthen its US dollar clearing services.

The banks are the first movers to provide electronic Eurex USD prices on Tradeweb’s interest rate swaps platform, but more are expected to start streaming in the near future.

This follows the already established request for quote and voice market for Eurex USD swap prices.

“Our primary target is to build a liquid alternative for euro swaps in the EU,” said Danny Chart, head of fixed income business development at Eurex.

He added, “However, it is important for many EU-based firms who predominantly run euro portfolios to be able to clear their multi-currency portfolio in a single CCP. We therefore truly appreciate the contributions of the banks supporting USD clearing.”

The exchange noted that there is a growing demand from EU end-clients for additional currencies.

It  believes that this would better allow them to migrate their euro-heavy portfolios to Eurex while at the same time keeping their full exposure in a single clearing house.

The visibility of two-way Eurex USD prices from dealers is an important move as the exchange looks to create a more stable and competitive ecosystem for euro clearing in Europe.

“Our focus as a swaps market maker is to provide competitive prices at Eurex, with USD being a key part of this,” said Dr. Thilo Roßberg, head of FICC markets at LBBW.

He added, “As a pioneer in streaming Eurex USD swaps, we have long been providing our customers with a reliable supply of liquidity in order to establish a viable EU-based CCP liquidity pool.”

Eurex’s notional outstanding in long-dated euro-denominated OTC interest rate swaps was above 10 trillion at the end of October, up 30%  year-on-year.

Market share stood at 18% in October. Total notional outstanding in Eurex OTC interest rate derivatives was above 20 trillion at the end of October translating to a market share of 20%.

©Markets Media Europe 2021

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