CME Quick Hits: Equities, FX, Rates, Metals, Research

Equities

Trade the liquid, cost-efficient QQQ alternative: Micro E-mini Nasdaq-100 futures, which have now surpassed one billion total contracts traded since launch. “Our Micro E-mini Nasdaq-100 futures are among the most actively traded equity index products at CME Group, averaging more than 1.1 million contracts per day in Q3-to-date,” said Paul Woolman, Global Head of Equity Index Products at CME Group. “At one-tenth the size of their benchmark E-mini counterpart, these micro-sized futures allow market participants to hedge or scale exposure with enhanced flexibility around major market-moving events, especially those with the potential to impact the tech-heavy sector of the Nasdaq-100.” Read the Press Release.

FX

In a new article from The Trade on dispelling the myths around FX futures liquidity, learn the benefits associated with centrally cleared futures in FX and how best to target liquidity in the highly fragmented global FX market.

A common misconception that arises from discussions with clients surrounds liquidity, with many believing that FX futures are not liquid enough for them to transact and that OTC venues remain “better”. Although OTC volumes are higher than futures in aggregate, CME FX ranks as one of the top individual venues by volume across the whole FX landscape.

CME FX futures and options have seen significant growth in both volumes and participation over the last few years. In 2022, on average over $80 billion of FX futures traded every day, with a total of $40 trillion notional centrally cleared across 40 currency pairs.

Rates

CME ESTR Futures Achieve New Open Interest Record

• New high-water mark in ESTR futures OI at 16,397
• OI +1,698 on Sept. 14th on a day the ECB hiked 25 bps, the largest single day increase in CME ESTR OI ever
• Sep23 ESTR futures reacted to the hike falling 6.5 bps, while Euribor rate only moved by 2 bps

Euro STIR traders are increasingly choosing CME €STR futures for their ability to quickly reflect changes in rate expectations. Sep23 €STR futures fell 6.5 bps on Thursday as the ECB hiked policy rates by 25 bps. 3M Euribor, meanwhile, moved by only 2 bps.

Metals

Cobalt Hydroxide CIF CJK (Fastmarkets) futures provide a solution that promotes price transparency and streamlines risk management for the growing needs of the EV sector, battery manufacturing, industrial applications, and the aerospace industry. The Cobalt Hydroxide futures joins our existing suite of battery metals futures products, which includes Cobalt Metal, Lithium Hydroxide, Molybdenum Oxide, and Lithium Carbonate.

Research

Blu Putnam and Erik Norland’s article looks at how a surge in interest rates by major central banks, rising geopolitical tension centered on the Russia-Ukraine war and frosty relations between the U.S. and China, extreme weather that could jeopardize food crops and the economic impact from aging populations in industrialized nations are among factors that could change the nature of risk management leading to heightened market volatility. Details here.

Highlights:

• Geopolitical tensions, elevated interest rates could change the nature of risk management
• As a result, volatility in some markets could increase, with wide intraday price swings
• As difficult-to-quantify uncertainties rise, so could the chances of event risk
• Risk management approaches need to adapt to how markets react differently to event risk

One Week CME Group Volatility Index (CVOL) Aggregate Asset Class Variance

The CME Group Volatility Index (CVOL) delivers the first ever cross-asset class family of implied volatility indices based on simple variance. Find more advanced measures and granular asset class metrics by clicking this link: CME Group Volatility Index (CVOL).