Liquidity Landscape: Q2 2026 EMEA
The Q2 2026 Liquidity Landscape report explores notable shifts in European equity market behaviour. While trading volumes remained above historical norms, urgency-driven execution softened, prompting flows to rotate back toward end-of-day and negotiated trading.
Urgency fades, volumes don’t
European equities began to normalise in Q2, as market conditions eased and risk appetite returned. Following its relative outperformance versus the US at the start of the year, Europe gave back its relative advantage as the March sell-off cleared and risk appetite returned. Trading activity eased from Q1's record levels but remained elevated, with average daily notional of €69 billion, the second-highest quarterly reading in over five years.
Natural liquidity resurfaces
Urgency was the key driver of Q1 but was absent in Q2. The closing auction rebounded to 24.3% of addressable liquidity, up 1.5%. OTC and off-book on-exchange activity gained nearly 4% combined, primarily at the expense of lit continuous venues, as investors proved more willing to commit to larger, negotiated trades. Periodic auctions moderated to 9.7% of addressable liquidity, but participation continued to grow, highlighting their continued importance within the European execution ecosystem.
Dark trading remained broadly stable, though above-LIS activity fell to record lows before showing early signs of recovery toward the end of June. This early signs of re-engagement suggest a temporary absence of the long-only investors who supply block liquidity, rather than a structural abandonment of it.
Why this matters now
Market structure reform remains firmly in focus. The European consolidated tape is expected to launch in September, while regulators continue to evaluate the role of periodic auctions, systematic internalisers and market data quality within the broader European equity ecosystem. Together, these developments are expected to shape the next phase of market structure and liquidity accessibility across Europe.
Other notable trends:
The EU's first consolidated tape for equities is expected to go live in September 2026, following the "One Europe, One Market" roadmap signed in April
Volatility remained elevated, but its drivers changed, shifting from the geopolitical shock and forced de-risking seen in Q1 to a market recalibrating expectations around growth, rates, and the durability of the peace dividend.
France saw the sharpest rotation among Europe's largest markets, with OTC activity rising to 12% and off-book on-exchange to 9.2%, the largest category shifts observed across the UK, France and Germany.
Please refer to the full report for sources.
Gareth Exton Head of Execution + Quantitative Services EMEA, Prashanth Manoharan Head of Execution Consulting, and Henry Baugniet Equities Execution Data Analyst , in partnership with Rebecca Healey, Redlap Consulting