CME Group to launch T-Bill futures

Rick Steves

“As we continue to see record risk transfer in the U.S. Treasury market, our new T-Bill futures will enable clients to hedge exposure to short-term debt with the same value proposition offered across our U.S. Treasury and SOFR complexes.”

CME Group is set to enhance its benchmark interest rates offering with the introduction of U.S. Treasury Bill (T-Bill) futures, scheduled to launch on October 2, pending regulatory review.

This strategic move comes in response to surging demand for CME Group U.S. Treasury futures, with open interest reaching a record-breaking 19,814,295 contracts on August 23.

Cash-settled futures contracts based on 13-week U.S. T-Bill auction discount yield

The introduction of T-Bill futures represents a significant addition to CME Group’s short-term interest rate (STIR) product portfolio. These cash-settled futures contracts will be based on the 13-week U.S. Treasury Bill auction discount yield, offering market participants a powerful tool to manage and hedge their exposure to short-term debt.

Agha Mirza, CME Group Global Head of Rates and OTC Products, said: “As we continue to see record risk transfer in the U.S. Treasury market, our new T-Bill futures will enable clients to hedge exposure to short-term debt with the same value proposition offered across our U.S. Treasury and SOFR complexes.”

The remarkable growth in open interest in U.S. Treasury futures demonstrates increased efficiencies, deep liquidity, and volume surpassing associated cash markets.

T-Bill futures and margin offsets against CME Group Interest Rate futures

Upon their launch, T-Bill futures will enjoy automatic margin offsets against existing CME Group Interest Rate futures and will adhere to the rules and regulations of CME. Furthermore, these futures contracts will soon become eligible for portfolio margining against other cleared interest rate swaps and futures, further enhancing their utility for market participants.

CME Group’s existing suite of U.S. Treasury futures has witnessed exceptional growth, with open interest reaching an impressive $2.4 trillion in 2023, marking a year-over-year increase of 49%. The average daily volume for these futures contracts has also surged to a record-breaking 5.2 million contracts.

As CME Group continues to expand its offerings and address evolving market needs, the launch of T-Bill futures reaffirms its commitment to providing diverse and innovative solutions for market participants worldwide.

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