EuroMTS today said that liquidity has improved substantially across benchmark Treasury bill issues, following the introduction of the EuroBenchmark Treasury Bill Market for French, German, Italian, and Spanish securities.
Volumes on the market have surpassed EUR500 million in the first two weeks of operation, EuroMTS said.
In addition, the domestic French and Italian Treasury bill markets have particularly benefited, with record turnover of EUR6.09 and EUR23.1 billion respectively in March, reflecting increases of 25% compared to the previous month, the company said.
Participants in the domestic markets are also benefiting from the tighter spreads offered by the EuroBenchmark Treasury Bills Market as these bills are listed in parallel on their respective MTS domestic markets.
The benchmark status has permitted spreads to narrow by one basis point, or approximately 25%, since launch, EuroMTS said. To date, thirteen market makers have committed to provide liquidity, while four market takers have joined the market.
“We are extremely pleased that the European Treasury bills sector has immediately benefited from EuroMTS benchmark status, which increases transparency and promotes turnover,” said Gianluca Garbi, chief executive officer of EuroMTS Ltd. “As anticipated, the creation of a better coordinated euro T-bill market, which can be likened to a virtual single European issuer, has increased the liquidity of this market.”
Treasury bills from France, Germany, Italy and Spain were initially listed on the EuroBenchmark Market. To qualify for listing, bills are required to have an outstanding size of EUR1 billion or more and to be issued or tapped in the previous 60 days, EuroMTS said. Three buckets have been defined, including a three-month bucket (11-13 weeks), a six-month bucket (24-28 weeks) and a 12-month bucket (47-55 weeks).
Participants may act as European Treasury bill Specialists (quoting all EuroBenchmark Treasury bills), Single Market Treasury bill Specialists (quoting bills of at least one eligible issuer) and as Price Takers (can lift prices, but not insert quotes), the company said.