CME Rival ELX Plans June 18 Launch For Eurodollar Futures

The nearly year-old exchange, ELX Futures LP, intends to launch Eurodollar futures on June 18.

ELX announced the start-up date Monday morning, but its plans for listing the interest-rate product were revealed for the first time last October.

The all-electronic exchange's Eurodollar contracts will mirror those offered at CME Group Inc. (CME), the world's largest futures exchange.

ELX, which made its debut last July, is one of two exchanges attempting to whittle away at CME's dominance in interest-rate derivatives trading.

Eurodollar futures are CME's most popular interest-rate product, although trading volumes have only recently picked up in the aftermath of the credit crunch that led to the worst financial crisis since the Great Depression.

Eurodollar futures are a closely watch gauge of short-term interest-rate expectations.

The contracts reflect the market's view for the direction of the three-month London interbank offered rate, or Libor, which determines the cost of borrowing U.S. dollars in the London interbank market.

A consortium of banks, trading firms, and technology companies provide the financial backing for ELX, which aims to provide customers with a less-expensive trading alternative to CME.

The all-electronic exchange currently lists futures on the two-, five-, and 10-year Treasury notes, on 30-year Treasury bonds and on ultra-long Treasury bonds--all identical to CME products.

So far, the exchange has garnered a market share of about 3%.

Last month, ELX announced it will launch federal-funds futures by the end of this year. It also plans to offer options for the various interest-rate products.

A three-way battle was set up earlier this month when NYSE Euronext (NYX) said its Liffe U.S. derivatives unit will launch a "full suite" of Eurodollar and Treasury futures in the third quarter of this year.

-By Howard Packowitz, Dow Jones Newswires; 312-750-4132; howard.packowitz@dowjones.com

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