CME Group Announces First Trades of Mexican F-TIIE Interest Rate Futures
CME Group announced the launch of the first trades for its new interest rate futures based on the Central Bank of Mexico's Overnight TIIE funding rate (F-TIIE) on May 24, 2021. Notable institutions, including BBVA México, Monex Casa de Bolsa, and Banorte, executed the trades via Altura Markets and CME Direct. This initiative aims to support the Central Bank's goal of developing robust risk-free rates in Mexico and enhances the existing OTC Mexican interest rate swaps clearing business. This product is expected to facilitate the transition to a modern market structure for Mexico's financial system.
- Launch of F-TIIE interest rate futures on May 24, 2021, enhancing Mexican financial markets.
- Support from key financial institutions like BBVA México and Banorte for the new product.
- Aims to develop robust risk-free rates and a domestic funding curve in Mexico.
- None.
CHICAGO, May 25, 2021 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced the first trades of the new interest rate futures based on the Central Bank of Mexico's Overnight TIIE funding rate (F-TIIE). Launched on May 24, 2021, the trades were transacted by BBVA México, Monex Casa de Bolsa and Banorte, and were executed via Altura Markets and CME Direct.
"We are pleased to have received industry support for our first Mexican F-TIIE interest rate futures contract," said Agha Mirza, Global Head of Rates and OTC Products at CME Group. "Our futures contract aligns with the Central Bank of Mexico's objectives to develop robust risk-free rates (RFR) and establish a domestic funding curve, while complementing our OTC Mexican interest rate swaps clearing business, dollar-peso FX futures contracts and SOFR futures."
"Mexico fully embraces the global trend for new market-based reference rates, and today an optimal instrument for trading and hedging the overnight reference rate of the Central Bank of Mexico has arrived," said Alejandro Faesi, Head of Global Markets and Institutional Sales for Banorte. "Banorte is proud to join CME Group in this effort."
"The development of an active and liquid derivatives market for Funding TIIE is one of the key elements to allow this rate to become the benchmark for the Mexican market," said Manuel Meza, Head of Global Markets, BBVA Mexico. "Corporate issuers and bank loans in MXN will soon follow in having F-TIIE as the reference rate."
"Funding TIIE futures at CME Group, along with other contracts like SOFR and USD/MXN currency futures, are instrumental for transitioning to the new and modern market structure for Mexico and its financial markets participants. This is a game changer," said Javier Alvarado, CEO, Monex Casa de Bolsa.
The Mexican peso-denominated contract will be cash-settled against the compounded F-TIIE rate over monthly contract periods. F-TIIE is published daily by the Central Bank of Mexico and is based on the highly developed and liquid Mexican repo market. Mexican F-TIIE Rate futures are listed with and subject to the rules of CME. For contract specifications and more information, please visit: www.cmegroup.com/ftiie.
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. With a range of pre- and post-trade products and services underpinning the entire lifecycle of a trade, CME Group also offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.
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SOURCE CME Group
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