2nd UPDATE: CME, ICE Average Daily Volume Jumped In November
December 02 2010 - 1:50PM
Dow Jones News
CME Group Inc. (CME) had its third-busiest trading month on
record in November, with volume in its core interest-rate futures
buoyed by the U.S. Federal Reserve stimulus and Europe's latest
sovereign debt crisis.
The volume of contracts linked to rates rose 46% last month over
the same period last year, with trade in agricultural and metals
markets also higher. November volume was surpassed only by that of
the post-Lehman fallout in September 2008 and May this year in the
wake of the flash crash.
Some analysts increased their fourth-quarter earnings' estimates
for CME, the world's largest futures exchange by volume. The stock
was recently up 4% at $312.05, the first time it has climbed above
$300 since June.
IntercontinentalExchange Inc. (ICE), which is more focused on
commodity products, also reported a double-digit volume gain last
month, extending a broad industry rebound in derivatives trading
activity from slower summer months.
Frankfurt-based exchange operator Deutsche Boerse AG (DB1.XE)
reported that churning European debt markets in November lifted
interest rate-linked derivatives volume on its Eurex exchange 38%
over the year-ago period, with an average 2.4 million traded a
day.
In November, CME's daily volume rose 31% from a year earlier to
a daily average of 14.2 million contracts. Some 7 million
interest-rate futures contracts changed hands each day last month
at CME, which has a 98% share of the U.S. market.
Anticipated shifts in interbank lending rates and U.S. Treasury
yields saw a surge of hedging activity tied to the Fed's latest
round of quantitative easing that will see the central bank buy
$600 billion in Treasury bonds.
Persistent debt fears plaguing European nations, leading to a
European Union-brokered rescue package for Ireland in late
November, drove traders in and out of safe-haven investments in
CME's Eurodollar contracts. Foreign-exchange contract volume
climbed 23% and equity-index futures rose 15% from a year
earlier
Volumes at CME also were lifted by the quarterly rolling of
Treasury futures positions from December-dated contracts to March
2011.
A confluence of dry conditions in the U.S., too much rain in
Australia and cold conditions in Russia have roiled CME's benchmark
wheat contracts, helping lift volume in its agricultural
commodities group nearly 50% over the November 2009 level.
Broad economic uncertainty helped drive trading in Brent crude
oil futures and options one-quarter higher at Atlanta-based ICE
propelling the company's average daily activity to 1.4 million
contracts in November. Energy trading at CME, host to the rival
West Texas Intermediate crude oil market, rose 6.1%.
ICE also reported a 71% jump in sugar derivatives trading amid a
busy month for agricultural commodities. Its shares were recently
up 3.4% at $119.54, reaching a five-month high during the
session.
-By Jacob Bunge and Nathan Becker, Dow Jones Newswires;
212-416-2855; nathan.becker@dowjones.com
--Howard Packowitz and Tom Polansek contributed to this
article.
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