Euro overnight rate

Jumbo issues generally trade with the euro overnight rate (EONIA), although the smaller-sized issues sometimes go special. The offered side in repo is dominated by investment funds and the mortgage bank issuers themselves. 

The size of the repo market reflects the size of the cash market in government bonds, which is the largest in Europe. The instruments used in the market are listed in Exhibit 10.26. Securities marked with a are listed by ISMA as Euro GC securities. Most transactions are one-week maturity, while, unusually for repo, overnight trades are rarer. This may be because stamp duty is chargeable at a flat rate on domestic deals, and so this is an incentive for market participants to undertake longer-dura-tion repo trades. 

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