CME Integrates FX Link With Refinitiv and IHS Markit
CME Group, the world’s leading and most diverse derivatives marketplace, announced it has integrated its FX Link platform with the Refinitiv Trade Notification (RTN) and IHS Markit’s MarkitSERV messaging services.
By connecting with Refinitiv and IHS Markit, FX Link customers can now receive OTC spot FX messages directly via RTN or MarkitSERV which will streamline onboarding and meet their Straight Through Processing (STP) requirements.
The integration was completed in March 2021 and is now being used by banks such as Goldman Sachs for price discovery and to access additional liquidity for FX swaps in eight currency pairs.
“We recognize how important automation and ease of connectivity is for our customers, and we continue to invest in enhancements to provide flexible access to the growing FX Link marketplace,” said Paul Houston, Global Head of FX Products, CME Group. “By integrating with RTN and MarkitSERV, a larger group of market participants are able to use FX Link, a cleared and capital efficient pool of firm liquidity for FX swaps.”
“We are excited to have access to FX Link as a marketplace for capital efficient FX swap trading, and the ability to use RTN for the spot leg messaging has enabled us to easily onboard and to keep the messaging consistent with other ECNs,” said Jan Scheffel, Co-Head of Global Short Term Macro Trading, Goldman Sachs.
“Refinitiv Trade Notification provides thousands of customers with transparency and genuine STP for their FX trades across 150 publishers including single dealer, multi-dealer, and voice broker platforms,” said Dean Berry, Group Head of Trading & Banking Solutions, Refinitiv. “We are pleased to now support messaging from CME FX Link activity in order to standardize and streamline how customers can integrate in an efficient way with this growing marketplace for FX swaps.”
“MarkitSERV’s multi-asset STP service helps our customers manage the diverse and fragmented nature of the OTC marketplace, combining STP from any execution source with flexible processing and workflow solutions to reduce the cost, risk and complexity of post trade operations,” said Mark Briant-Evans, Head of FX Business Development, IHS Markit. “We are excited to work with CME FX Link to provide customers with turn-key integration to this innovative platform for FX swap execution.”
CME FX Link provides a complementary pool of liquidity to bilateral FX swaps that is available in a central limit order book on a credit agnostic, all-to-all basis with truly firm pricing. It combines an OTC spot transaction on the near leg with a centrally cleared and capital efficient FX Future on the far leg. FX Link currently supports eight currency pairs, which combined account for 69% of the FX swaps market according to the most recent BIS survey.
CME Group to Launch Mexican F-TIIE Interest Rate Futures
CME Group, the world’s leading and most diverse derivatives marketplace, announced it will introduce interest rate futures based on the Central Bank of Mexico’s Overnight TIIE funding rate (F-TIIE). Monthly contracts based on the Mexican F-TIIE Rate will become available for trading on May 24, 2021, pending regulatory review.
The Mexican peso-denominated contract will be cash settled against the compounded F-TIIE rate over monthly contract periods. F-TIIE is published daily by the Central Bank of Mexico and is based on the highly developed and liquid Mexican repo market. The contract aligns with the Central Bank of Mexico’s objectives to develop robust risk-free rates (RFR) and establish a domestic funding curve.
“We are delighted to support the objectives of the Central Bank of Mexico. From managing the economic risk of central bank policy changes or hedging Bondes D coupons, to creating new yield curves and developing RFR-based products, clients can utilize this new futures contract in a variety of different ways,” said Agha Mirza, Global Head of Rates and OTC Products at CME Group. “We expect the new Mexican F-TIIE rate futures to complement our existing OTC Mexican interest rate swaps clearing business, our dollar-peso FX futures contracts and CME’s SOFR futures, reinforcing our leading position as the home of risk-free rate futures.”
“We are fully supportive of the adoption of RFRs that align with global standards and help to further enhance liquidity in our underlying F-TIIE rate. The development of a deep and liquid derivatives market is key for establishing F-TIIE as a benchmark rate for Mexico,” said Gerardo Garcia, General Director of Market Operations, Central Bank of Mexico. “We welcome this move from the CME Group to help facilitate derivatives trading and enhance liquidity in the Mexican interest rate market.”
Mexican F-TIIE Rate futures will be listed with and subject to the rules of CME. For contracts specifications or more information, please visit: www.cmegroup.com/ftiie.
Average daily volume in CME’s U.S. Treasury futures and options grew more than 30% year-over-year.
CFTC Commissioner said futures have to be traded on a licensed and regulated market.
The buy side pulled into the next phase of the uncleared margin rules can trade further down the curve.
New derivatives facilitate exposure to Chinese equities.
The complete range of fixed income futures and options will be available later this year.