CME Group to launch European overnight index futures

New futures are expected to help clients manage sovereign debt risk in Europe once available.

CME Group is set to launch European overnight index futures based on RepoFunds Rate (RFR) benchmarks and the Euro Short-Term Rate (€STR) in Q4 of this year, subject to regulatory review.

The RFR futures will be cash-settled contracts based on RFR benchmarks, a measure of overnight funding costs derived from centrally cleared repo trades executed on BrokerTec and European electronic fixed income trading platform, MTS, now part of Euronext.

European overnight index futures will be available to trade on CME Globex and for submission of clearing via CME ClearPort. In addition, the futures will be subject to the rules of CME, cleared by CME Clearing and will receive margin offsets automatically against existing interest rate futures upon launch.

“Our new European Overnight Index futures will support customers with liquid and capital efficient tools for hedging overnight money market and repo rates in European markets,” said Sean Tully, global head of rates and OTC products at CME Group.

“In addition to our increasingly liquid SOFR futures that help customers manage interest rate exposure in the US, our new European futures will help our customers manage sovereign debt risk in Europe.”

Earlier this week, CME Group revealed plans to launch Euro-denominated Bitcoin and Ether futures on 29 August, subject to regulatory review. The new futures will provide clients with improved tools to trade and hedge exposure to Bitcoin and Ether.