- SERIX data sheds light on pan-European retail investor sentiment last month
- Sentiment turned sharply bearish towards UK pound, as well as Spain and Italy
- Northern European indices remain stable, while S&P 500 grows less bearish
Spectrum Markets, the pan-European trading venue for securitised derivatives, has published its SERIX European retail investor sentiment data for May (see below for more information on methodology), with notable trends including bearish sentiment towards the UK pound, as well as Italian and Spanish indices.
Sentiment on the UK pound turned sharply bearish last month, recording SERIX values of 91 against both the Japanese yen and US dollar respectively, down from 104 and 99 in April. SERIX data also revealed continued bullish Euro sentiment against the pound, with the EUR/GBP indicator reading 107, compared to 108 in April.
Sentiment towards northern European indices remained broadly stable in May, while retail investors were less positive on Italy and Spain however, with both the MIB and IBEX dropping into bearish territory, falling to 98, compared to 106 and 107 respectively in April.
“With the British pound enjoying a strong month against the yen and dollar, particularly during the second half of May, the bearish SERIX sentiment seen on GBP/USD and GBP/JPY underlyings suggests European retail investors held limited expectation of further rises and sought to capitalise on downward price movements in the short term,” notes Michael Hall, Head of Business Development at Spectrum Markets.
During May, 63.8 million securitised derivatives were traded on Spectrum, with 35.5% of individual trades taking place outside of traditional hours (i.e. between 17:30 and 9:00 CET). 85.7% of this activity was on indices, 8.9% on currency pairs and 5.4% on commodities, with the top three traded underlying markets being OMX 30 (32.5%), DAX (20%) and S&P 500 (12.5%).
Looking at the SERIX data for the top three underlying markets, the OMX 30 continued the trend towards bullish seen since the start of the year, moving from 94 in April to 97 in May, while the DAX dropped into bearish territory, falling from 101 to 99. The S&P 500 remained just in the bearish zone with 99, but this marked a significant jump from 90 in April.
Calculating SERIX data
The Spectrum European Retail Investor Index (SERIX), uses the exchange’s pan-European trading data to shed light on investor sentiment towards current development in financial markets.
The index is calculated on a monthly basis by subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:
SERIX = (% bullish trades - % bearish trades) + 100
Trades where long instruments are bought and trades where short instruments are sold by retail investors are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought by retail investors are considered bearish trades. Trades that are matched by retail clients are disregarded. (For a detailed methodology and examples, please visit this link).
About Spectrum Markets
Spectrum Markets is the trading name of Spectrum MTF Operator GmbH. Headquartered in Frankfurt am Main, Germany, it is a pan-European trading venue for securitised derivatives aimed at financial institutions and their retail investors. Since launch, trading has been available in: Germany, France, Italy, Spain, Sweden, Norway, the Netherlands, Ireland, and Finland.
Regulated by BaFin and MiFID II compliant, the exchange uses a uniquely open architecture system to allow investors to trade with increased choice, control and stability. Through its pan-European ISIN, 24/5 trading services and its own proprietary venue, Spectrum enables a guaranteed baseline level of liquidity over a range of products and is able to swiftly and safely match a significant number of orders and process multiple quotes every second. Further information can be found at spectrum-markets.com
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