CME BrokerTec reported a 1% increase in the European Union repo market’s average daily notional value (ADV) for May, reaching €298 billion.
The company noted that volumes rose steadily throughout the month, with daily volumes surpassing €300 billion consistently during the final week of May.
In the United States, the repo ADV stood at $274 billion for May. CME highlighted that many traders closed out positions after the Federal Open Market Committee (FOMC) indicated that rate easing would not occur soon.
BrokerTec’s US Treasury average daily notional volume (ADNV) for May was $84 billion, as treasury market volatility dropped to its lowest level in over two years.
John Edwards, Global Head of BrokerTec at CME Group, commented, “Market participants continue to monitor changing economic conditions, inflation expectations, and treasury issuance in anticipation of FOMC actions for the rest of the year.”
Erik Norland, Chief Economist at CME Group, added, “US Treasury yields fell by 9-13 basis points across the curve in May, with the most significant declines observed in the five to ten-year range. In contrast, Eurozone yields rose by approximately 5-8 basis points across the curve, despite expectations of a potential rate cut by the ECB as early as June.”
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