Secondary market structures

Secondary market data is continuously transmitted through a representative part of the members of the Bund Issues Auction Group. They provide the Finance Agency with an indicative overview of the secondary market for German Government securities.

The reported turnover in German Government securities provides an insight into the structure of the secondary market.

A representative share of the member banks reports their transactions in German Government securities on a voluntary basis – broken down by  type of security (Bubills, Schaetze, Bobls, Bunds, inflation-linked and green), region and type of counterparty. The approximate structures of the secondary market can be identified on the basis of these trading volumes and net positions.

The gross trading volume is derived by adding up the reported sales and purchase volumes of the member banks. The net trading volume is the balance of sales minus purchase volumes.

For example, a net position of € -22 bn vis-à-vis brokers corresponds to a € 22 bn higher volume of purchases by member banks from brokers than sales to brokers. The trading data published here are provisional, as later subsequent submissions may lead to corrections.

Semiannual comparison of trading volumes 1/2020 vs. 1/2021

€ bn 1/2020 1/2021
(Gross) trading volume 2,306 2,365
Net trading volume 104.6 178.2

The trading volume reached € 2,365 bn in the first half 2021. Compared with the first half of 2020, this is an increase of 3 %.

The net trading volume increased in the first half of 2021 to the highest value in the statistics to date of around € 178 bn. Compared to € 105 bn in the first half of 2020, this is an increase of 70 %. Generally the net trading volumes are predominantly determined by the issuance volumes of the Federal Government securities during the corresponding time period.

Financing instruments 1st half-year 2021

Trading volume - Financing instruments

Broken down by security type, the most significant percentage increase in the 1st half of 2021 compared with the 1st half of 2020 was in trading in Treasury discount paper (Bubill). Their share of trading in all Federal securities as a whole rose from 8 % to 11 %, or from €181 bn to € 263 bn.Inflation-linked Federal securities (ILB) recorded the second-highest turnover growth in percentage terms at 31 %, with a share of around € 84 bn or just under 4 % (vs. 3 % in 2020), the highest level of trading since the first half of 2017. After two weak half-years, 10-year Federal bonds (Bund10), which also include the 7- and 15-year maturities introduced in 2020, found their way back to their usual trading level, with an increase of € 39 bn or 3 %, of around € 1,200 bn, corresponding to more than half of the total trading volume in all Federal securities. Green Federal securities (Green) accounted for € 24 bn or 1 % of the total trading volume in the first full half-year since their new issue.

Turnover in Federal notes (Bobl) fell most significantly: -€ 51 bn or -13 %. Their share of total trading fell by around 3 percentage points to 14 %, compared with the first half of 2020. Federal Treasury notes (Schatz) also recorded turnover losses of 13 % or € 33 bn compared with the first half of the year. 219 bn represent the weakest half-year in the series. Trading in 30-year Federal bonds (Bund30) decreased by 9 % or € 23 bn.

Gross trading (in € bn) 1/2020 1/2021
Bobl 393 342
Bubill 181 263
Bund10 1,156 1,195
Bund30 260 237
Green - 24
ILB 64 84
Schatz 252 219

Net trading volume - Financing instruments

In a comparison of net sales in the first half-years of 2020 and 2021, the Bubills top the list in absolute terms with increases of € 38 bn (+73 %). € 90 bn in net purchases (by other market participants from banks in the Bund Issues Auction Group) mark a record half-year for them. In percentage terms, on the other hand, the Bund10 are in the lead with a plus of 83 % (+€ 18 bn). All other Federal securities are up in the single-digit billion range, in percentage terms ranging from +36 % for Bobl to +79 % for ILB. Worth mentioning are the net purchases of Bund30 amounting to around € 13 bn (+65 %) - the highest since the statistics began. Net sales in instruments (from other market participants to the banks in the bidding group) have always been very rare. So this wasn't the case this half-year for any of the security segments, too.

Net trading (in € bn) 1/2020 1/2021
Bobl 10.4 14.1
Bubill 51.9 89.9
Bund10 21.6 39.5
Bund30 7.6 12.5
Green - 0.5
ILB 2.5 4.4
Schatz 10.6 17.3

Regions 1st half-year 2021

Trading volume - Regions

A glance at the trading regions reveals few shifts. Traditionally, half of the volume was traded with counterparties in the rest of Europe (Europe excluding euro area countries). However, turnover shifted marginally from here (-2 %) and from Asia (-9 %) to the second most important trading region, the euro area (+8 %; highest turnover since 2013), with a share of almost 30 %, and to the Americas (+12 %), whose share of trade across all regions increased by 2 percentage points to 15 %. The changes in the other regions were marginal in absolute terms at a low level.

Gross trading (in € bn) 1/2020 1/2021
Africa 2 2
America 310 347
Arabian countries 6 9
Asia 153 139
Euro area 635 688
Other Europe 1,200 1,181

Net trading volume - Regions

In line with the exceptionally strong central bank purchases, the euro area and Asia dominate net purchases among the regions in the first half of 2021. Counterparties from the euro area increased their net purchases for the fourth half-year in a row. In the second half of 2020 alone they purchased € 94 bn. Compared with the first half of 2020, the volume of purchases tripled to a record level of € 111 bn. Asian counterparties' net sales of € 11 bn turned into net purchases of around € 14 bn in the second half of 2020, tripling to now almost € 48 bn in the last six months.

For the first time since the second half of 2013, the traditionally second or at time even most important net buyers from the rest of Europe were thus pushed out of the top two by Asian investors, buying on balance just around € 29 bn. No less volatile, American counterparties sold a net volume of around € 9 bn in the first half of 2021 - after net purchases of € 11 bn a year ago and after record purchases of € 31 bn in the first half of 2019. Net sales from Arab states and Africa have fluctuated around +/- € 1 bn on average for the past ten years.

Net trading (in € bn) 1/2020 1/2021
Africa 1.4 0.1
America 11.4 -9.3
Arabian countries -1.2 0.1
Asia -10.9 47.6
Euro area 37.3 111.0
Other Europe 66.6 28.7

Institutions 1st half-year 2021

Trading volume - Institutions

In the analysis regarding the trading institution, brokers set the tone. In addition to brokers, which include above all electronic trading platforms via which the actual trading partner cannot be identified. Together with the equally important asset managers and banks, brokers have been responsible for around 80 % of trading in Federal securities for years. For the first time since the statistics began, the central banks managed to join this group as the fourth most important counterparty in the first half of 2021.

Asset managers and brokers, each with a share of well over € 600 bn or almost unchanged shares of around 27 %, each, of total trading respectively, are once again the most active traders in Federal securities in the first half of 2021. Banks, which only contributed solid 16 % to total turnover after 19 % in 2020, generated the second lowest turnover since the statistics began at € 389 bn (-11 %). Central banks (and other public institutions) also account for 16 % of turnover in the first half of 2021, although this represents in their case an increase of 4 percentage points compared with 2020. With a share of € 371 bn (+31 % compared with the first half of 2020), they unfolded the strongest trading activities since 2013. Hedge funds marked the highest turnover since the start of the statistics with a share of 10 % (vs. 9 % in 2020) and turnover of € 238 bn (+19 %). Pension funds, insurance companies and others account for less than 5 % of total turnover.

Gross trading (in € bn) 1/2020 1/2021
Asset manager 668 650
Banks 436 389
Broker 632 631
Hedge funds 200 238
Pension funds 40 36
Other 26 28
Insurances 22 21
Central banks 283 371

Net trading volume - Institutions

The dominance of asset managers, banks and central banks already known from the gross trade analysis also existed in net sales for most of the period under review until the start of the ECB purchase programme. In the second half of 2015, asset managers first disappeared completely as buyers on balance, before returning as buyers at earlier levels in the first half of 2018, banks became net sellers while at the same time. In 2018, hedge funds joined as significant net buyers. They consistently purchased more Federal securities than banks through the first half of 2020 - even more than asset managers in each of the first six months.

In the first half of 2021, however, central banks accounted for the highest net purchases ever made by a counterparty group since the start of the statistics. After their net purchases almost doubled to € 134 bn from the first to the second half of 2020, they rose by another 50 % to a record € 202 bn a further half-year later.
By contrast, net purchases of the second strongest buyers, commercial banks, at € 8 bn and asset managers at around € 6 bn (the lowest figure since 2017), seem negligible. The two traditionally strong net buyers purchased a full 48 % and 76 % less respectively compared with the first half of 2020. Pension funds, with net purchases of almost € 7 bn (highest volumes since 2010), ranked among the top 3 buyers of Federal securities for the first time since 2017. Hedge funds bought € 5 bn on balance, less than a-fifth of their purchase volume in the first half of 2020. Insurance companies purchased more than € 2 bn in Federal securities for the first time in more than ten years.

Net trading (in € bn) 1/2020 1/2021
Asset manager 23.6 5.7
Banks 15.8 8.3
Broker -37.8 -56.4
Hedge funds 27.0 5.0
Pension funds 3.3 6.8
Other 2.1 4.1
Insurances -0.1 2.3
Central banks 70.7 202.3