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CME Group’s Interest Volumes Rose in 1Q15

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Interest rate

CME (CME) reported interest rate volumes of 7.6 million in 1Q15, up from 6.7 million in 1Q14. Interest rate volumes contribute almost 50% of the company’s total volumes. Average rate per contract remained flat at $0.48 during the first quarter compared to 1Q14. However, it improved by 1 basis point compared to the previous quarter.

After a strong first quarter, the company has seen a slowdown in activity since the dovish sentiment from the Fed meeting in mid-March. Weaker economic data tend to push expectations of a Fed rate move further out, as evidenced in federal funds futures markets. The rate hike decision debate is even more dependent on upcoming economic data in the spring and summer. Volatility in rate products dropped in April. However, the company is expecting to deliver good numbers based on diverse product offerings.

CME generated an operating profit margin of 56.82% over the last 12 months compared to its peers:

Together, these companies form 1.91% of the Financial Select Sector SPDR Fund (XLF) and 0.35% of  the SPDR S&P 500 ETF (SPY).

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Investing in new capabilities

CME is working with TriOptima to offer multilateral compression for interest rate swaps for FCM house accounts. In March, CME launched a new Web tool in conjunction with ICAP and Beast Apps called RapidRV. This robust offering provides over 15 different analytics that allow customers to explore relative value and comparative pricing of swaps, cash treasury markets, and CME Group interest rate futures. The customers with real-time pricing feeds would be able to view side-by-side pricing analysis and opportunity assessment across fixed income products.

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