Thursday, December 1, 2016
CME Group to set monthly trading record, boosted by Trump: CFO
CME Group Inc (CME.O) will set a monthly record for trading volumes in November, a top executive said on Wednesday, as U.S. President-elect Donald Trump's surprise victory has injected uncertainty into markets.
Three of CME's top 10 trading days for volumes have occurred since Trump's election on Nov. 8, and volumes have been averaging more than 20 million contracts per day, said John Pietrowicz, CME's chief financial officer, on a webcast of a JP Morgan investor conference.
That is up about 45 percent from November 2015, when the average daily volume was 13.7 million contracts.
At rival Intercontinental Exchange Inc (ICE.N), volumes in November were set to be up 10 percent from a year ago, although not an overall record, spokeswoman Kelly Loeffler said in an email.
Republican Trump's win may continue to support strong volumes and volatility in markets because he is "an inherently volatile guy who's hard to predict," said Craig Pirrong, a finance professor at the University of Houston.
New York businessman Trump has never previously held public office. He has spoken about stimulating the U.S. economy and improving infrastructure, driving trading in futures and options for products ranging from Treasuries to metals, CME executives said at the conference.
Infrastructure investments would require the use of copper and other commodities and "customers are recognizing, 'Hey there's going to be some price volatility that we hadn't factored in before,'" Derek Sammann, CME's head of commodities and options, said on the webcast.
On Nov. 9, the day after the election, futures and options trading volumes set a one-day record of 44.5 million contracts at CME, which owns the Chicago Mercantile Exchange and other markets. The previous record was 39.6 million contracts on Oct. 15, 2014.
On Nov. 23, CME set a record open interest of 117 million contracts, beating the previous record from June.
CME's Pietrowicz said a new president with new policies could create risks and uncertainty "depending on your points of view." CME's markets were "really providing a lot of opportunity for our customers to take point of view in terms of that kind of level of uncertainty," he said.
Uncertainty about global oil production has also helped drive trading in energy markets.
ICE Brent crude was headed for a daily volume record on Wednesday, after some of the world's largest oil producers agreed to curb production for the first time since 2008, according to the exchange.
That market was on track for its second largest volume month, ICE said.
(Editing by Jeffrey Benkoe and Grant McCool)