Over-the-counter (OTC) derivatives markets grew in the first half of 2024, according to new data from the Bank for International Settlements (BIS).
The notional value of OTC derivatives rose by 9% in the first six months of the year, and was up 2% over the previous 12 months, it reported.
Foreign exchange (FX) swaps and forwards were up in the first half, along with commodities and equity-linked derivatives, including oil derivatives. Interest rate derivatives were flat, the report said.
Specifically, the value of FX derivatives rose 10% year-over-year to US$130 trillion.
“Contracts involving the yen on one side had trended upwards throughout 2023 and rose particularly strongly in the first half of 2024,” the report said. “This came on the back of a depreciating yen and growing market speculation regarding Japan’s emergence from a negative interest rate environment.”
The largest category in OTC markets, interest rate derivatives, was up 1% to US$579 trillion.
“The most robust growth occurred in the smaller segments of the derivatives market,” the BIS said. “Geopolitical tensions in early 2024 (e.g. disrupted oil flows through the Red Sea) went hand in hand with risk hedging in oil derivatives.”
At the same time, stronger U.S. equity markets coincided with growing positions in equity-linked derivatives, which rose by 12% to US$8.7 trillion in the first half of 2024.”