Introduction
The Overnight Index Swap (OIS) market, particularly focused on the Secured Overnight Financing Rate (SOFR), is witnessing significant developments as we approach 2026. With the ongoing transition away from LIBOR, the adoption of SOFR-based instruments is gaining momentum. According to the International Swaps and Derivatives Association (ISDA), the notional amount of OIS contracts referencing SOFR rose to approximately $6 trillion in 2023, marking a 30% increase from the previous year. As the market evolves, understanding the dynamics of fixed and floating rates in this segment will be crucial for businesses and finance professionals.
Top 20 Overnight Index Swap OIS SOFR Fixed Floating 2026
1. United States
The U.S. is the largest market for OIS, with SOFR becoming the preferred benchmark for interest rate swaps. The total volume of SOFR-linked OIS reached $3.5 trillion in 2023, reflecting strong institutional adoption.
2. United Kingdom
The UK has been transitioning from LIBOR to SONIA but is closely monitoring SOFR developments. The OIS market here has seen a growth of 25% in SOFR-linked swaps, with a total market size of about $1 trillion.
3. Japan
Japan’s financial market is increasingly integrating SOFR, with approximately $500 billion in OIS contracts linked to the rate. This transition is driven by a need for more reliable interest rate benchmarks.
4. Germany
Germany is a leading European player in the OIS market, with SOFR adoption growing as institutions aim to diversify their risk profiles. The total volume of SOFR OIS contracts in Germany is around €400 billion.
5. Switzerland
Switzerland’s financial institutions have begun utilizing SOFR, with OIS volume reaching approximately $200 billion. The Swiss National Bank supports this shift to enhance market stability.
6. Canada
Canada has seen a robust increase in SOFR-related OIS, with a market size of about CAD 150 billion. This growth is attributed to cross-border transactions and interest in U.S. dollar-denominated assets.
7. Australia
In Australia, SOFR OIS volumes have increased significantly, reaching AUD 100 billion. The Reserve Bank of Australia’s support for SOFR as a viable benchmark has driven this trend.
8. France
France has a growing interest in SOFR, with OIS contracts totaling approximately €300 billion. French banks are shifting towards SOFR to improve their hedging strategies.
9. Singapore
Singapore is emerging as a hub for SOFR transactions in Asia, with OIS volumes surpassing SGD 80 billion. The Monetary Authority of Singapore actively promotes the use of SOFR as a regional benchmark.
10. Netherlands
The Netherlands is witnessing a gradual adoption of SOFR OIS, with a market size of around €200 billion. Dutch financial institutions are increasingly using SOFR for their derivatives trading.
11. Hong Kong
Hong Kong’s financial sector is adapting to SOFR, with OIS volumes of approximately HKD 90 billion. The region’s deep financial markets facilitate the transition to more stable benchmarks.
12. Italy
Italy’s OIS market is slowly integrating SOFR, reaching a total size of approximately €150 billion. Italian banks are exploring SOFR as part of their risk management strategies.
13. South Korea
South Korea’s OIS market is gradually embracing SOFR, with an estimated volume of KRW 50 trillion. The Bank of Korea supports this shift for enhanced financial stability.
14. Sweden
Sweden has seen an uptick in SOFR usage, with OIS contracts totaling about SEK 70 billion. The Riksbank’s influence in promoting alternative benchmarks is evident in this growth.
15. Spain
Spain’s OIS market is evolving with the introduction of SOFR, reaching approximately €120 billion. Spanish banks are increasingly interested in diversifying their interest rate products.
16. Brazil
Brazil is beginning to explore SOFR as a benchmark, with OIS volumes around BRL 30 billion. The Brazilian central bank is considering the implications of adopting international benchmarks.
17. Mexico
Mexico’s financial sector is observing a gradual shift towards SOFR, with OIS contracts totaling about MXN 20 billion. Local banks are starting to offer SOFR-linked products to clients.
18. India
India is in the early stages of adopting SOFR, with OIS volumes estimated at INR 15 billion. The Reserve Bank of India is assessing the viability of international benchmarks for local markets.
19. Russia
Russia’s financial institutions are starting to engage with SOFR, with OIS market sizes around RUB 10 billion. The Central Bank of Russia is monitoring global benchmark trends closely.
20. China
China is cautiously exploring SOFR, with OIS volumes at approximately CNY 5 billion. The People’s Bank of China is evaluating the use of global benchmarks in its financial system.
Insights
The OIS market, particularly for SOFR, is projected to continue its upward trajectory as institutions globally shift away from LIBOR. The projected growth in SOFR-linked OIS is expected to reach $10 trillion by 2026, driven by regulatory mandates and the need for reliable interest rate benchmarks. Additionally, the global push for transparency and efficiency in financial markets will likely enhance SOFR’s position. As financial institutions adapt to these changes, the focus will remain on effective risk management strategies and the integration of SOFR into existing portfolios. With the total market for interest rate derivatives surpassing $500 trillion, the relevance of SOFR will only increase in the coming years.
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