Equity Index market briefing March 2023

February saw more evidence of divergence between major equity markets. European stocks consolidated the strong January gains while US benchmark indices retraced. Much commentary in the US that drove recent trade positioning was on the divergence between the fixed income yields and forward-looking P/E ratios. The dynamics in Europe are slightly different.

This global backdrop of varied regional conditions has aided Eurex volumes; Mini-DAX® Futures and DAX® Options benefitted, a similar pattern for SMI® and STOXX® Europe 600 Futures. The TRF and index dividend segments also saw a repeat of strong interest on the EURO STOXX® banks, FTSE 100 and EURO STOXX® Select Dividend 30. 

February was a very active month in VSTOXX® Futures. The most active day saw 109k lots traded. End clients were net buyers, turning their overall position back from net short to flat in March and long in all later expiries. This implies investors do not trust the January rally. VSTOXX® Options also had an exceptional month; the most active day saw 128k lots traded. End clients traded twice as many calls as puts, maintaining a much more pronounced long exposure to European volatility.

We enter the first major roll period in 2023 this month with a significant amount of open interest, and we expect trading volumes to be robust again. We will also reach the important milestone of going live with the NextGenETD project and members can also look forward to exciting new product launches to be announced shortly.