CME plans September launch of US Treasuries and futures platform

The Chicago-based group said on Thursday BrokerTec Chicago, designed to allow clients to manage more effectively their US Treasury bond vs Treasury futures positions, will go live on September 15.

CME already operates a New York-based central limit order book (CLOB) for US Treasuries but the launch of a Chicago-based platform supporting cash and futures should appeal to the growing community of firms trading the spread between Treasuries and Treasury futures.

Speaking about the plan in March, CME global head of fixed income Mike Dennis said: “As clients navigate this period of heightened uncertainty and record debt issuance, US Treasury spread trading continues to drive price discovery and liquidity across cash, futures and repo markets.”

“By launching a new trading venue, we will bring the full US Treasury ecosystem closer together, delivering simplicity and efficiency for global market participants.”

The US Treasury futures market has been busy this year with CME trading in the first five months 433 million lots of its flagship three-month SOFR futures contract, up a quarter on last year, according to FOW Data.

That included a monthly CME record for the short-term interest rate future of 120 million lots in March, according to FOW Data.

CME faces competition in US treasury futures from BGC Group’s FMX Futures which launched two and five-year US Treasury futures in May after going live with three-month SOFR futures in September last year.

FMX Futures traded 30,000 lots of SOFR futures and a handful of Treasury futures last month compared to 78.8 million contracts at CME, according to FOW Data.

The US Treasury bond market looks set for a shake-up next year when mandatory clearing takes effect. CME Group, Intercontinental Exchange and LCH have said they are working on solutions to compete with incumbent the DTCC.