CME Group to Launch 20-Year U.S. Treasury Bond Futures on March 7

Rhea-AI Summary

CME Group will introduce 20-Year U.S. Treasury Bond futures on March 7, pending regulatory approval. This product aims to meet growing demand for hedging tools in the U.S. Treasury market, especially since over $450 billion in 20-Year bonds have been issued since May 2020. The new futures will enhance market efficiency and provide better exposure management. CME's existing U.S. Treasury futures offerings saw a 15% increase in average daily volume in 2021, reaching a record 4.5 million contracts.

Positive

• Introduction of 20-Year U.S. Treasury Bond futures responds to market demand for hedging tools.
• Total issuance of 20-Year bonds exceeds $450 billion, indicating robust market activity.
• Existing U.S. Treasury futures grew 15% year-over-year, reaching record volumes.

Negative

• None.

CHICAGO, Jan. 10, 2022 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced it will expand its benchmark U.S. Treasury futures and options offering with the addition of 20-Year U.S. Treasury Bond futures on March 7, pending regulatory review.

The new 20-Year U.S. Treasury Bond futures will allow for delivery of original issue 20-year U.S. Treasury bonds with remaining terms to maturity at delivery of at least 19 years 2 months and not more than 20 years.

Complementing CME Group's existing suite of deeply liquid U.S. Treasury futures and options, which grew more than 15% year-over-year during 2021 to a record 4.5 million average daily volume, 20-Year U.S. Treasury Bond futures will offer greater efficiency and precision in managing exposure at the 20-year maturity point on the U.S. Treasury curve.

"The introduction of a futures contract on the U.S. Treasury's 20-Year bond responds directly to market need for a hedging tool at a time when managing U.S. Treasury market risk is more important than ever," said Agha Mirza, CME Group Global Head of Rates and OTC Products. "Since the U.S. Treasury began issuing 20-Year bonds in May 2020, total issuance has been over $450 billion, creating customer demand for a new product that establishes 20-year yield exposure. As a result, the design of this new contract represents extensive feedback from a wide set of clients and the broader fixed income trading community." 

20-Year U.S. Treasury Bond futures will receive automatic margin offsets against existing interest rate futures upon launch and will be listed with, and subject to, the rules of the CBOT. Additionally, these contracts will become eligible for portfolio margining against other cleared interest rate swaps and futures shortly after launch.

For more information on this product, please see: www.cmegroup.com/20y.

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.

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively. Dow Jones, Dow Jones Industrial Average, S&P 500 and S&P are service and/or trademarks of Dow Jones Trademark Holdings LLC, Standard & Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as the case may be, and have been licensed for use by Chicago Mercantile Exchange Inc.  All other trademarks are the property of their respective owners. 

# # #

CME-G

View original content:https://www.prnewswire.com/news-releases/cme-group-to-launch-20-year-us-treasury-bond-futures-on-march-7-301456490.html

SOURCE CME Group

FAQ

When will CME Group launch the 20-Year U.S. Treasury Bond futures?

CME Group plans to launch the 20-Year U.S. Treasury Bond futures on March 7, 2022, pending regulatory review.

What is the significance of the 20-Year U.S. Treasury Bond futures?

The new futures will provide a hedging tool and enhance market efficiency by allowing better exposure management at the 20-year maturity point.

How much has been issued in total for the 20-Year U.S. Treasury bonds?

Since May 2020, total issuance of 20-Year U.S. Treasury bonds has exceeded $450 billion.

What was the average daily volume of CME's U.S. Treasury futures in 2021?

In 2021, CME's U.S. Treasury futures offerings achieved a record average daily volume of 4.5 million contracts, growing over 15% year-over-year.