International derivatives market CME Group announced today that new credit futures contracts are scheduled to begin trading on Monday, June 17, 2024, pending regulatory review.
CME Group futures will be the first futures to help market participants manage duration risk through a commodity spread with US Treasury futures. In addition, for the first time, investors can expose and manage credit risk through futures contracts on the Bloomberg duration hedge index.
“Since announcing our expansion into credit futures earlier this year, we have received very positive feedback from market participants with exposure to credit, interest rates, equities and other assets,” said Agha Mirza, Global Head of Rates and CME’s OTC Group. “Designed with efficiency in mind, our credit futures will support margin trading with automatic margin hedges against interest rate and equity index futures.”
The contracts will be based on the Bloomberg US Corporate Index, which measures the performance of investment-grade corporate bonds, and the Bloomberg US High Yield Very Liquid Index, which is designed to measure a liquid, diversified component of the high-yield corporate bond market.
“CME Group’s upcoming launch of Bloomberg US Corporate Bond Indices futures supports continued growth in fixed income markets,” said Umesh Gajria, Global Head of Index Linked Products, Bloomberg Index Services Limited. “These credit futures can provide investors with a capital-efficient vehicle to manage exposures and risks to their bond portfolios through the derivatives market.”
Available for trading on CME Globex and eligible for submission to clearing through CME ClearPort, the US Corporate Bond Index futures will be quoted and subject to CME rules.