New Eurex Futures to Offer Hedging for European Union Bonds

Eurex has announced that it will launch futures on EU bonds starting in September. The new instrument aims to give traders a way to hedge exposure or gain market access and comes at a time when interest in futures is rising, especially among prop trading companies.

Futures to Strengthen EU Debt Market

The Euro-EU Bond Futures (FBEU) contract will be physically deliverable and complement existing trading in EU bonds across cash and repo markets.

“The launch of the Euro-EU Bond Futures is more than just a new product for Eurex,” said Matthias Graulich, Global Head of Products & Markets at Eurex. “It is a strategic commitment to supporting European ambitions for greater autonomy at a time when the continent is relying on additional debt issuance and investors are seeking tailored tools to manage their exposure to EU debt.”

Eurex said the product will help improve liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and align the EU more closely with major sovereign issuers like Germany, France, and the US—markets where futures already play a key role in bond pricing and risk management.

The launch follows close cooperation with the European Commission and market participants. The EU, now among the largest borrowers globally with over €600 billion in outstanding debt, has reportedly seen its bonds reach liquidity levels comparable to national governments.

Risk Tools for a Growing Debt Market

According to the announcement, the new contract will cover EU bonds maturing between 8 and 12 years and offer a fixed 6% coupon, mirroring Eurex’s other 10-year sovereign bond futures.

Eurex’s initiative also follows a similar step by ICE, which launched futures on an EU bond index in late 2024. However, Eurex’s product will be unique in its physical delivery and integration into established fixed income markets.

Sean Kozak, the CEO of the Canadian-based prop firm Tickblaze, recently explained why prop trading companies are now opting for regulated futures.

In a post on LinkedIn, Kozak listed some of the reasons, including capital efficiency, execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term quality, volatility edge, regulatory environment, and trader talent.

“When markets are super volatile, prop firms can’t afford to experience slippage or latency, which is common for retail platforms. But futures markets offer institutional-grade infrastructure that those platforms simply can’t match,” he said.

“Some of the benefits of futures are direct exchange access and low-latency routing, transparent order books with real-time depth, and consistent fill logic during high-volume times,” he added.