CME to Launch FX Monthly Futures

CME Group will expand its suite of FX derivatives with the launch of six FX monthly futures next month, providing clients with access to the front months of the FX forward curve. 

The new contracts are in addition to the existing quarterly futures and will cover EUR/GBP, as well as five major currency pairs against the US dollar: AUD; GBP; CAD; EUR and JPY.

Subject to regulatory approval, the new instruments will be available for trading on CME from 27 February. 

“The launch is in response to feedback from existing and prospective customers who trade FX futures for the capital efficiencies they can offer in comparison to OTC FX,” Paul Houston, CME Group executive director and global head of FX, tells Profit & Loss. “But some want more granularity and more points on the curve to trade,” he adds.

The monthly contracts are launching on the pairs where CME is seeing the most activity and demand. Currently the group offers over 90 FX futures and more than 30 FX options.

“We are seeing a lot of interest from the buy side and also banks who want to trade forward FX as an FX future,” says Houston. “We also expect new customers to move to our market place as a result of this launch, either trading on an outright or spread basis.” 

Each currency pair will offer an additional three monthly contracts at any given time, resulting in four consecutive months of monthly expiries. The first serial listed will be the April 2017 contract.

Tom Gentile, head of FX trading at Crabel Capital Management, adds: “We are excited for the launch of FX monthly futures at CME as more tenor granularity will give the market increased flexibility in which to trade.”

Julie Ros

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