Eurex, a derivatives exchange, has officially relaunched its EURIBOR derivatives segment, to offer in the short-term interest rate (STIR) and derivatives space. This move coincides with the commencement of Eurex's STIR Partnership and Liquidity Provider Programs.

EURIBOR Derivatives Relaunch and Liquidity Programs

Eurex's relaunch initiative is accompanied by the introduction of a liquidity provider program, designed to increase on-screen liquidity in Three-Month EURIBOR Futures, Three-Month Euro STR Futures, Options on Three-Month EURIBOR Futures, and One- to Four-Year EURIBOR Mid-Curve Options Contracts.

A total of 19 partnering banks have demonstrated to support Eurex's EURIBOR segment relaunch by enrolling in the newly introduced STIR Partnership Program. Eurex now offers an interest rate product suite that covers the short- and long-ends of the spectrum, spanning listed, over-the-counter, and repo business.

More than 760,000 contracts have been traded in Three-Month Euro STR (€STR)) Futures since their launch on January 23, 2023. These money market futures provide a listed, centrally cleared, and cash-settled solution for trading and hedging €STR, effectively complementing Eurex Clearing's €STR Overnight Index Swap offering.

Eurex Partners with Goldman Sachs

Eurex has forged a strategic partnership with Goldman Sachs to bolster its European FX liquidity hub, Finance Magnates reported earlier. This collaboration aims to enhance services and capabilities of Eurex in the FX market.

Goldman Sachs will join Eurex as a member, a clearing member, and a liquidity provider for off-book transactions, playing a dual role that offers advantages to market participants. By assuming these roles, market participants can maintain bilateral trading relationships while benefiting from fully cleared FX contracts.

Jens Quiram, the Global Head of FIC Derivatives & Repo Sales at Eurex, underscored the significance of Goldman Sachs' involvement in the operations of the derivatives exchange. He noted that the financial giant's dual role would expand the reach of Eurex's listed FX liquidity, marking it as "another major milestone on our way to expand Europe's leading listed FX liquidity hub."

Joseph Nehorai, the Global Co-Head of Futures at Goldman Sachs, highlighted the increasing costs in the FX markets, which are driving a shift toward listed FX derivatives. This shift enables the buy-side community to reap the benefits of both OTC trading and centrally cleared derivatives, thus enhancing the options available to market participants.

Impact on the European FX Market

The partnership between Eurex and Goldman Sachs carries implications for the European FX market, bringing about several changes.

The collaboration is set to fortify the local FX liquidity hub, offering improved pricing and efficient trades to market participants. By allowing the conversion of OTC trades into exchange-traded and centrally cleared contracts, the partnership significantly enhances risk management and eliminates uncleared exposure in OTC trading.

The FX market has seen a rising appetite for listed FX derivatives. Goldman Sachs' support positions Eurex to meet this demand, providing the advantages of both OTC and centrally cleared trading options.