CHICAGO, June 9, 2021 /PRNewswire/ -- CME
Group, the world's leading and most
diverse derivatives marketplace, today announced it will expand its
suite of deeply liquid U.S. Treasury futures and options with the
introduction of four new Micro Treasury Yield futures contracts on
August 16, pending regulatory
review.
These innovative, micro-sized contracts will provide
market participants – from institutions to sophisticated, active,
individual traders – exposure to the
yield of on-the-run Treasury securities in an efficient,
cost-effective way. Micro 2-Year, Micro 5-Year, Micro
10-Year, and Micro 30-Year Yield futures will be sized
at $10 per basis point of yield, and
will be cash settled to newly created BrokerTec cash
U.S. Treasury benchmarks.
"The introduction of Micro Yield futures responds directly
to client demand for products that reference one of the most widely
quoted market metrics – yield on U.S. Treasury securities," said
Sean Tully, CME Group Global Head of
Financial and OTC Products. "Our new, smaller yield-based futures
are designed for market participants of all sizes who want to gain
exposure to, or more precisely hedge against, U.S. Treasury auction
issuance. These new contracts will complement our existing suite of
U.S. Treasury futures and options, and further demonstrate the
value of offering cash and futures markets
side-by-side."
The launch of Micro Yield futures comes at a time when
U.S. Treasury risk management is more important than ever. Over the
last year, U.S. debt issuance has surpassed levels not seen since
WWII, and the U.S. budget deficit recently reached a record
$1.9 trillion from October 2020 to April
2021. At the same time, average daily volume in CME Group's
U.S. Treasury futures and options grew more than 30% year-over-year
during both April and May, in response to increased hedging and
trading activity.
BrokerTec U.S. Treasury benchmarks are already providing
robust volume weighted average yields for seven on-the-run U.S.
Treasuries (2-Year, 3-Year, 5-Year, 7-Year, 10-Year, 20-Year and
30-Year), are calculated and published four times a day and are
administered by CME Group Benchmark Administration Limited (CBA).
The benchmarks are based on industry best practices, compliant with
UK Benchmark Regulation and aligned to IOSCO Principles. CBA is the
benchmark administrator with Chicago Mercantile Exchange Inc. (CME
Inc.) providing Calculation Agent services.
The contracts will be listed on and subject to the rules
of the CBOT. For more information on Micro Yield futures, please
visit
www.cmegroup.com/yieldfutures.
As a leading and diverse derivatives market operator, CME
Group is the parent of four U.S.-based designated contract markets
("DCMs"): Chicago Mercantile Exchange Inc. ("CME"), Board of Trade
of the City of Chicago, Inc.
("CBOT"), New York Mercantile Exchange, Inc. ("NYMEX"), and the
Commodity Exchange, Inc. ("COMEX") (collectively, the "CME Group
Exchanges"). These exchanges offer a wide range of products
available across all major asset classes, including futures and
options based on interest rates, equity indexes, foreign
exchange, energy, metals and agricultural
commodities. CME Group offers futures trading through the CME
Globex® electronic trading platform ("Globex"), fixed income
trading via BrokerTec, foreign exchange trading on the EBS
platform, and central counterparty clearing services through CME
Clearing, a division of CME. With a range of pre- and post-trade
products and services underpinning the entire lifecycle of a trade,
CME Group also offers optimization services through TriOptima and
trade processing and reconciliation services through Traiana and
RESET. CBA capitalizes on CME Group's wealth of electronic
transaction-based data in the calculation of its indices and
benchmarks.
CME-G
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SOURCE CME Group