A liquid secondary market exists for German Government securities on both the capital market and the money market. A turnover rate of more than five times the volume of the long-term average amount of tradable papers is a key factor for the benchmark status of German Government securities.
The market for German Government securities is one of the world's largest and most liquid markets for sovereign bonds. In 2021, a representative part of the members of the auction group traded a volume of around € 4.8 tn. The average outstanding nominal volume during this period (excluding the German government's own holdings) of nearly € 1.4 tn was turned over more than three times. This corresponds to a turnover of € 19 bn per trading day.
|trading volume (bn. €)||4,831||4,255||4,091||4,694||4,790||4,294||4,715||4,869||5,832||5,501|
These secondary market data collections on the auction group capture trading volumes (purchases plus sales, excluding primary market transactions, including transactions on electronic trading platforms) in the financing instruments of Bubills, Schaetze, Bobls, Bunds, inflation-linked Federal securities and Green Federal securities. Capital and coupon strips as well as U.S. dollar bonds are excluded.
Liquidity Factors Future Market and Repo Market
The good tradability of Federal securities is reflected in the execution of buy and sell orders at fair prices in line with the market. The basis for this is the reliable issuance policy of the Federal government as well as sufficiently large volumes of individual issues.
Based on German government securities, the futures contracts that are traded on Eurex are another essential factor for the very liquid trading. A functioning repo market, in which German government securities play an important role as collateral, also has a reciprocal influence on their liquidity on the secondary market.