Futures Markets Update. Julie Winkler March 25, 2009. Outline . Background on CME Group and Product Development Process Current Market Landscape Developments in Commodity Markets New Developing Markets - Emissions markets Career Opportunities. CME Group Overview.
March 25, 2009
Diverse Customers Managing Risk
Q4 2008 Pro Forma Revenue Mix
Commodities & Other
Proprietary trading firms, primarily algorithmic
Proprietary trading of banks and investment banks
Notes and Bonds
Top 25 Hedge Funds
Other - includes smaller member firms and individual traders
Note: Customer segmentation percentages are Q408 estimates and reflect legacy CME and CBOT products only
ADV trending up so far in Q1 2009
CME Group Pro Forma ADV by Month
(round turns in millions)
FX up 10%
Commodities/Alt. Inv. Up 21%
Energy/Metals up 10%
Interest Rates up 15%
E-mini Equities up 14%
Equity Standard up 14%
“ All markets need more transparency.”
“ Markets would be safer if they were all on a regulated exchange.”
“ OTC markets are opaque and risky.”
“ In 1994 we sounded a number of clear warnings …to assure this rapidly growing [OTC] market did not result in systemic problems for our economy.”
“ OTC markets have had dire consequences… in contrast our markets have been a net positive for the economy.”
“ OTC markets can be fixed with several key changes.”
“ We were right then and we are right now.”
“ Banks key to CDS delay”
Many players which are part of the global financial eco-sphere, which are key to the trade facilitation process and functioning of our financial markets.
Bank, Dealer & Broker Execs
FCMs/ Clearing Firms
Hybrid OTC / Futures
Global supply concerns increase, as consumption rises faster than production. World stocks-to-use ratio at historical low in 2007 at 14.2% and projected to decline further to 12.6% in 2008.
Prices stabilize due to largest planted crop since 1946. Over 93 million acres planted.
Battle for acreage due to increase in renewable fuels mandates.
Overall macro economic weakness has adversely affected commodity prices during the last half of 2008
Amounts Outstanding of OTC “Other” Commodity Forwards, Swaps, and Options (including energy)
Annual Volume Turnover for Exchange Traded Commodity Derivatives
*Through September 2008
2008 Global Emissions Market Cleared Futures Volumes by Product
Source: CME Group. Note this data aggregates ECX, CCFE, BlueNext, Nord Pool and Green Exchange.
* Note: All EUA and CER contracts are 1,000 metric tons of CO2, except for the CCX CFI contract is 100 metric tons of CO2.
Informed industry observers believe the US carbon market could grow to 2-3 times the European market.
We must operate as if a federal cap and trade bill
will be enacted in 2009