CME Group, the leading derivatives marketplace, is set to launch trading for its new credit futures contracts on June 17, pending regulatory reviews.
CME Group’s credit futures will be the first futures contracts to help market participants manage duration risk through an inter commodity spread with U.S. Treasury futures. In addition, for the first time ever, investors can gain exposure to and manage credit component risk through futures on Bloomberg’s duration-hedged index.
The new credit future will launch alongside the company’s U.S. Treasury complex.
“Since announcing our expansion into credit futures earlier this year, we have received very positive feedback from market participants with exposure to credit, interest rates, equities and other assets,” Agha Mirza, CME group global head of rates and OTC products, said. “Designed for efficiency, our credit futures will support spread trading with automatic margin offsets against our Interest Rate and Equity Index futures.”
The new contracts will be based on the Bloomberg U.S. Corporate Index, which measures the performance of investment grade corporate bonds, and the Bloomberg U.S. High Yield Very Liquid Index, which measures a liquid, diversified component of the high yield corporate bond market.
“CME Group’s upcoming launch of futures based on the Bloomberg U.S. Corporate Bond Indices supports the continued advancement of fixed income markets,” Umesh Gajria, global head of index linked products, Bloomberg Index Services Limited, said. “These credit futures can provide a capital efficient vehicle for investors to manage their exposures and risks to their bond portfolios through the derivatives market.”
The credit future will be available to trade on CME Globex and eligible for submission to clearing via CME ClearPort.