Jul-23 Spanish Domestic GO Market Quotes: Thriving Forward Contract Demand and Embracing the Longer Term

In July, the Spanish domestic GOs market witnessed an impressive 127% surge in trading volume, driven mainly by significant large-volume transactions and a rising interest in forward GOs. Despite this substantial increase in volume, the market’s liquidity, measured by the number of trades, remained stable, partly influenced by the impact of the holiday season. Towards the end of July, market participants displayed heightened confidence in the market’s long-term prospects, although the decreased demand for 2023 vintages contributed to a bearish price trend. As a result, a notable price spread of up to 1 EUR/MWh emerged between 2023 and 2024 contracts. However, market participants anticipate that this large price spread will gradually correct from Week 32 as trading activity picks up following the holiday season.

Following the statistics provided by our data partners, we can discern the following noteworthy observations of the Spanish domestic GOs market: