09 Apr 2025
Eurex
Eurex Repo Monthly News March 2025
Market briefing: ''GC Pooling momentum continues amid moderate recovery''
by Frank Gast - Managing Director, Member of the Management Board, Eurex Repo
In March 2025, the market showed signs of stabilisation with a moderate recovery compared to February. Average daily traded volumes increased by 5%, driven notably by a strong 33% rise in GC Pooling activity. The Special Repo segment also recorded a healthy 3% increase. Overall, total term-adjusted volumes (TAV) rose by 4% month-on-month.
Outstanding and Traded Volumes
Compared to March 2024, average daily traded volumes declined slightly by 4.9%, with GC Pooling showing a mild drop of 4.2% and Repo & Special declining by 5.7%. On a quarterly basis (Q1 2025 vs Q1 2024), average traded volumes decreased by 2.5% across all segments, although GC Pooling increased by 4.6%, while the Repo segment was down by 11.6%.
Outstanding volumes followed a similar trend. March 2025 volumes were 16% below March 2024 levels, with GC Pooling down 10.2% and Repo down 20.5%. Year-on-year for Q1, average outstanding volumes dropped by 10.9% overall, with GC Pooling relatively stable at -3.4%.
Spreads and Collateral
The spread between the ECB and EXT overnight rates continued to narrow in March, averaging just 1.14 basis point for the month. This reflects a steady trend of convergence in recent weeks. The GC Pooling ECB basket rate remained closely aligned with the deposit rate throughout March, typically trading 1–2 basis points below it on average.
GC & Specials
Selected Bubills continued to trade at levels around €STR minus 140 basis points, maintaining this trend for several weeks.
In the Specials market, significant demand was observed for peripheral Eurozone government bonds, particularly for maturities ranging from one month to July.
On the GC Repo market, we saw a resurgence in high-volume trading. Italian 10-year government bonds were actively traded in one-day terms, while Spanish 10-year government bonds experienced concentrated trading in one-week terms. The bulk of this activity stemmed directly from the order book.
GC Pooling
GC Pooling remained the main growth driver in March, with daily traded volumes up 33% month-on-month. Term activity was particularly dynamic in longer maturities within the ECB basket, reflecting continued demand from banks for efficient liquidity management and balance sheet optimization around quarter-end.
Special Repos, Government Bonds & SSAs
In the Special Repo segment, Bunds showed a modest 2% increase in March compared to February but are still down 7% YTD versus 2024. Outside Bunds, Special Repo volumes rose by 8%, driven by increased trading activity in French and Italian government bonds. These segments benefited from improved quoting activity and greater interest across various maturities.
SSAs traded volume reached another high in March. While Special business remained stable, the average daily traded volumes increased by 9% compared to February, driven by higher activity in GC repo. In terms of issuers, EU bonds continued to trade at relatively unchanged high volumes, similar to February. The increase in SSAs was primarily due to higher volumes in KfW and EIB bonds.
Eurex Term Repo
The GC Pooling market experienced sustained order book execution at the long end of the curve. Trading in the 12-month term for the ECB and EXT ECB baskets maintained a spread of 2.5 basis points. Elevated trading activity was observed between 3-week and 3-month terms within the GC Pooling baskets, reflecting consistent market engagement.
Monetary Policy: ECB delivers sixth consecutive rate cut
On 6 March 2025, the European Central Bank (ECB) cut its key interest rates by 25 basis points, lowering the deposit facility rate to 2.50%. This marked the sixth consecutive rate cut since June 2024, as the ECB continues its path toward policy normalisation amid falling inflation and weak growth dynamics.
March inflation in the euro area declined to 2.2%, down from 2.4% in February, moving closer to the ECB’s 2% target. In parallel, the ECB revised its GDP growth outlook for 2025 to 0.9%, citing ongoing investment weakness and heightened global uncertainty, particularly around trade tensions.
Outlook
Despite persistent geopolitical uncertainties and fluctuating macroeconomic signals, March showed moderate recovery across several key segments of the repo market. With GC Pooling maintaining strong momentum and increased activity in term trades, market participants remain well-positioned to navigate the evolving landscape.
Events - save the date
Repo Roundtable and Eurex Get-Together
📍 Milan | 6 May 2025
📍 Paris | 22 May 2025
In case you are interested to join, please send an email to repo.sales@eurex.com.
57th edition of ICMA’s Annual General Meeting & Conference
📍 Frankfurt | 4-6 June 2025
Visit the panel with Frank Gast: The state and future prospect for the repo market
Moderator: Gareth Allen, Managing Director, Global Head Investment and Execution, Head of Repo Trading - Group Treasury, UBS
Panelists:
- Charlie Badran, Head of AXA Financing, AXA Investment Managers
- Amanda Butavand, Managing Director & Head of European Short Term Market Sales, Credit Agricole CIB
- Sabine Farhat, Head of Securities Finance Product Management, Murex
- Frank Gast, Managing Director, Member of the Management Board & Global Head of Repo Sales, Eurex Repo
- Michel Semaan, Global Head of LCH RepoClear, LSEG Post Trade
Annual ISLA Conference
📍 Hotel Puerta America | 17-19 June 2025
Volumes
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Participants: 167
