Posted by Colin Lambert. Last updated: June 20, 2024
Osttra’s TriReduce compression services says it has successfully completed a record inflation run for US inflation swaps at LCH, compressing over $600 billion in notional value.
The firm says this marks a 128% increase over the previous record, highlighting the increasing demand for efficient compression services amid continued inflationary pressures. It adds that increased trading volumes over the past few years, driven by higher inflation, have led to a significant build-up of notional at LCH. Currently, around $12 trillion in notional is spread across the three major currencies – USD, EUR, and GBP. The surge in activity has resulted in heightened interest from market participants, as the inflation portfolios now constitute a larger portion of their overall cleared rates portfolios.
“With outstanding notional building in at central counterparty clearing houses (CCPs), it is essential that we provide market participants with a way to manage their portfolios effectively,” says Erik Petri, Head of Osttra Optimisation. “This latest run perfectly demonstrates our ongoing commitment to providing scalable and innovative optimisation solutions, creating efficiencies for our customers.”
The news comes on the heels of UK inflation falling to the Bank of England’s target of 2.0% in May for the first time in nearly three years. Against this background, Osttra says TriReduce has scheduled the next two inflation runs for the EU and UK markets, the former in July, followed by the UK inflation run in August.
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