Dealers weigh hurdles to EU bond futures’ prospects

EU bond futures are getting closer to launch, but obstacles around issuance, liquidity and demand cloud the outlook

As the stock of European Union-issued bonds has grown in recent years, so too have demands from market participants for accompanying futures contracts to hedge or speculate on the debt.

But as the framework for trading and financing EU bonds has developed and liquidity is increasingly matching other European government bonds (EGBs), exchanges have moved ever closer to launching futures on the debt.

Ice was first out of the gate in November to announce the launch of a cash-settled version, to begin