CME Group, the world’s leading derivatives marketplace, announced it will launch European Overnight Index futures based on RepoFunds Rate (RFR) benchmarks and the Euro Short-Term Rate (€STR) in Q4 2022, pending regulatory review.

RFR futures will be cash-settled contracts based on RFR benchmarks, a robust measure of overnight funding costs. The benchmarks are derived from centrally cleared repo trades executed on BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets owned by CME Group, and MTS, a leading European electronic fixed income trading platform, part of the Euronext group. RFR benchmarks are administered by CME Group Benchmark Administration Limited (CBA).

“Our new European Overnight Index futures will support customers with liquid and capital efficient tools for hedging overnight money market and repo rates in European markets,” said Sean Tully, CME Group Global Head of Rates and OTC Products. “At a time of geopolitical uncertainty and large-scale transitions in monetary policy, we continue to provide market participants with new tools to meet their evolving risk management needs. In addition to our increasingly liquid SOFR futures that help customers manage interest rate exposure in the U.S., our new European futures will help our customers manage sovereign debt risk in Europe.”

Available to trade on CME Globex and for submission of clearing via CME ClearPort,  European Overnight Index futures will be subject to the rules of CME, cleared by CME Clearing, and will receive automatic margin offsets against existing interest rate futures upon launch.

Source: CME