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CME Group (CME) to Introduce BSBY-Based Interest Rate Futures

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CME Group Inc. CME will unveil cash-settled Bloomberg Short-Term Bank Yield Index (BSBY)-based interest rate futures, which will be available for trading purpose in the third quarter of 2021. The security exchange will also introduce over-the-counter (OTC) cleared BSBY swaps in the fourth quarter.

BSBY is a proprietary index, which can be used as a supplement to SOFR (secured overnight financing rate published by the Federal Reserve Bank of New York) in the lending market. It offers an array of credit sensitive reference rates to allow the banks in managing the spread between their funding costs and the interest earned on loans.

These new launches will be an addition to the prevailing short-term interest rate futures as well as Term SOFR index products.

Moreover, they will furnish the global market participants with a wide range of capital-efficient risk management tools that will assist them in the management of interest rate exposures.

CME Group remains focused on driving growth and customer acquisition by expanding, innovating and scaling up its core offerings, and increasing participation from non-U.S. customers. This is achieved by expansion of its global sales team, cross-selling of products, expansion of the existing benchmark products, product and service launch and deepening of open interest in core futures and options offerings.

As per its strategic initiatives, CME Group has undertaken various product launches. The company launched the Used Cooking Oil Methyl Ester (UCOME) futures contracts to support the transition to a greener energy market for transportation fuels, Pork Cutout futures and options to boost its leading agricultural benchmarks. Also, recently it launched Micro WTI futures to enhance its robust suite of energy futures and options.

CME Group focuses on maximizing futures and options growth globally, diversifying business and revenues, and delivering unparalleled customer efficiencies and operational excellence.

Shares of this largest futures exchange in the world in terms of trading volume as well as notional value traded has rallied 19.4% in the year-to-date period, outperforming the industry’s increase of 7.1%. Moreover, the company’s policy to ramp up its growth profile and capital position should drive shares higher.



The stock carries a Zacks Rank #3 (Hold) currently.

Stocks That Warrant a Look

Some better-ranked stocks from the finance sector are OTC Markets Group Inc. OTCM, Nasdaq NDAQ and Virtu Financial, Inc. VIRT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings of OTC Markets surpassed estimates in each of the last four quarters, with the average earnings beat being 33.47%.

Nasdaq surpassed bottom-line estimates in each of the last four quarters, with the average earnings beat being 8.30%.

Virtu Financial surpassed estimates in each of the last four quarters, with the average earnings beat being 30.04%.

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