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CME BrokerTec has reported a 1 per cent month-on-month increase in EU repo average daily notional value (ADV), generating €298 billion for May.
The firm says volumes increased as the month progressed with daily volumes being consistently above €300 billion during the final week of May.
For US repo ADV was US$274 billion for May. CME says that many traders closed out positions after the federal open market committee meeting made it clear that the Fed would not be easing rates soon.
BrokerTec US Treasury May ADNV generated US$84 billion as treasury volatility receded to its lowest level in over two years.
John Edwards, global head of BrokerTec at CME Group, says: “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, adds: “US Treasury yields fell 9-13bps across the curve in May with the biggest declines coming around the five to 10-year area of the curve.
"By contrast, Eurozone yields rose by around 5-8bps across the curve despite expectations that the ECB could cut rates as soon as June.”
