2023 Annual ETD Margin Rates Overview
Energy Crisis Resolution. In 2022, the European energy markets experienced unparalleled volatility, culminating in the most significant spikes in margin rates ever recorded. The resolution of the 2022 energy crisis has led to a sharp decrease in energy and emissions prices. A significant decrease in margins is anticipated for 2024. This trend is consistent with the post-crisis normalisation of market conditions.
Higher Interest Rates. A pronounced decrease in bond prices correlates with a global uptrend in interest rates. Margins rates have already increased accordingly and are in line with current market volatility.
Reduction in Margin Breaches. The significant reduction in margin breaches, resulting in an unprecedented low, is attributed to the fact that margin rates have stayed the same as during the COVID-19 pandemic without significant adjustments to align with the considerably reduced market volatility seen in 2023.
Future Outlook. The current financial stability is different from the high-volatility period of the pandemic. As the markets adjust to this new normal, margin rates will likely be lowered to reflect the current lower-risk environment. The Energy sector is expected to experience a significant decrease in margin rates in 2024.
The table below displays the average daily margin rates for various sectors in 2022 and 2023.
| 2023 | 2022 | Price Change vs Last Year | |
|---|---|---|---|
| Agriculture | 7.3% | 6.5% | -14.1% |
| Crypto | 23.4% | 27.5% | -1.1% |
| Currency | 3.3% | 3.1% | -0.5% |
| Emission | 20.6% | 18.3% | -29.2% |
| Energy | 20.5% | 19.7% | -41.9% |
| Equity | 38.5% | 44.6% | -12.5% |
| Freight | 27.2% | 25.1% | -21.8% |
| Interest Rate | 1.6% | 1.4% | -4.1% |
| Metals | 20.1% | 22.2% | 1.7% |
| STIR | 0.30% | 0.25% | -3.0% |
| Avg. Total | 16.27% | 16.87% | -12.6% |
This analysis is derived from a review of daily historical margins for 63 contracts across 14 Clearing Houses, serving as a benchmark for diverse sectors.
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