WFE Research Team , London , World Federation of Exchanges | May 2018

 

Interest rate derivatives volume traded in April 2018 recorded a sharp decline when compared to volumes in March 2018. An overall 28.9% decline in volumes traded was due to a fall in volumes across all three regions - Americas (-28.5%), Asia-Pacific (-40.6%) and EMEA region (-27.1%).

While Jan, Feb and Mar 2018 saw record high levels of volumes traded, this trend was reversed by the fall in volumes traded in April. High volumes in the first quarter of 2018 (up 17.4% on Q1 2017), could to a certain extent be explained by the uncertainty surrounding interest rate decisions by central banks in many markets. April 2018 was a calmer month, with the central banks of Europe, India, Australia, and Canada leaving interest rates unchanged. In the US, where over 50% of interest rate derivatives volumes are traded there was no interest rate announcement scheduled to take place in April, volumes declined by 28.5% on March 2018.

Interest Rates options and futures (millions of contracts)

However, when we compare the volumes in April 2018 to April 2017, the decline in number of contracts traded does not seem so significant. Infact, in all three regions the volumes traded changed only marginally – the Americas region up 0.9%, Asia-Pacific region down 0.9% and the EMEA region up 0.5% on April 2017. In the five-year period since 2013, the average volumes traded of interest rate derivatives per month has been the lowest in April indicating an ongoing trend of a dip in trading activity in this month.

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