CME Group’s Volumes Edge Higher on Volatility, FX Activity Jumps in May

After a slow trading month in April, May proved to be much more active, namely across FX and futures segments.

CME Group (NASDAQ: CME), one of the world’s largest derivatives marketplaces, has just reported its May 2017 aggregated volumes, sharing its trading statistics across key business segments. The latest figures were slightly higher in terms of average daily volumes, having been subject to a wide range of factors that influenced the market in May.

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The past month was dictated by several developments in both the United States and Europe. In the US, the Trump administration faced several growing political scandals, which helped spark market activity in the aftermath of a largely tranquil April. Volatility was also driven by the run up to French elections in Europe.

In terms of its overall volume for May 2017, CME Group reported an average of 16.5 million contracts per day, which was indicative of a marginal gain of 1.2 percent month-over-month from 16.3 million contracts per day in April 2017. This latest reading did snap a consecutive monthly decline at the exchange, which had fallen to recent lows last month. Additionally, May featured a total of 22 trading days, compared to just 19 trading days back in April 2017. 2017 has been characterized by pockets and droughts of volatility, that have ultimately dictated activity across the markets in H1.

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Looking at a yearly timetable as a means of comparison, May 2017 proved to more active at CME Group across the board, which corresponded to a year-over-year growth of 10.7 percent from 14.9 million contracts per day in May 2016. This growth was fueled by an outperformance in interest rates (20.0 percent year-over-year growth), and energy (20.0 percent higher year-over-year).

FX Rebounds as USD Activity Picks Up

CME Group’s average daily foreign exchange (FX) volumes was higher in May 2017, coming in at 823,000 contracts per day vs. 788,000 contracts per day in April 2017, or 4.4 percent month-over-month. This was due in part to moves in the USD, as the political fallout of Russian investigations in the US against the administration coupled with its policies have helped erode the USD over the past month.

Year-on-year, May 2017 figures were 14.9 percent from 716,000 contracts per day in May 2016. Meanwhile, another area of emphasis lately at CME Group has been its interest rate activity. For the month ending May 2017, CME Group snapped what had been several straight months of lower interest rate volumes with 8.9 million contracts per day. This figure is a 7.2 percent rise month-over-month vs. 8.3 million contracts per day in April 2017.

Finally, CME’s equity indexes during May 2017 again fell, this time to 2.3 million contracts per day, relative to 2.6 million contracts per day in April 2017, or -11.5 percent month-over-month. The latest reading was also lower by -10.0 percent year-over year from May 2016.

Moving forward, the emphasis will turn to the US Federal Reserve which is expected to raise interest rates again in June. Any other future developments within the Trump administration could also contribute to prolonged volatility as well, at least in US markets.

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