CME’s Trading Volumes Down In January, Expected To Rise With Oil And Metal Volatility

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CME Group (NASDAQ:CME) started the year on a rather dull note, with its daily trading volumes at 16 million contracts in January.  The exchange’s trading volumes were down 12% in comparison to January 2016, though this was primarily because of a tough year-on-year comparison due to the volatility seen in the global economy at the beginning of 2016, driven by uncertainty around oil prices, a slowdown in China and dim GDP growth in the U.S. at the time. However, on a sequential basis, trading volumes were up by 3% from the previous month.

Metals have continued to be in demand, with over 30% growth in volumes. This is because of increased volatility in the market from the continuous shift in gold and silver prices due to the strengthening of the U.S. dollar and other economic and political factors in the U.S. We expect the volatility to remain in the near term, driving metal derivative volumes.

We expect the oil market to remain volatile as well, as OPEC’s indications on further capping of the oil supply could drive oil prices. This will consequently have a positive influence on the energy derivative volumes.

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Interest rate derivatives are expected to pick up in pace with the possibility of a series of rate hikes by the Fed in 2017.

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