BGC Group and 10 Investment Banks Launch FMX Futures Exchange to Rival CME

  • Cantor Fitzgerald’s Howard Lutnick launches new interest-rate futures exchange to challenge CME Group
  • FMX Futures Exchange backed by BGC Group and 10 investment banks set to launch on Monday night
  • Exchange to trade in Secured Overnight Financing Rate (SOFR) and Treasury futures
  • Over $4 trillion worth of interest-rate futures traded daily, making them the world’s largest contracts
  • CME Group derived about half of its average daily volume from interest-rate business in Q2
  • FMX Futures received approval from Commodity Futures Trading Commission in January

Howard Lutnick, head of Cantor Fitzgerald and BGC Group, is breaking into the interest-rate futures market with the launch of a new exchange set to rival CME Group. The FMX Futures Exchange, backed by BGC and 10 investment banks, will begin trading in futures on the Secured Overnight Financing Rate (SOFR) and plans to add Treasury futures in Q1 2025. With over $4 trillion worth of interest-rate futures traded daily, these contracts are used by banks, investors, and businesses to hedge against interest-rate risk. The exchange received approval from the Commodity Futures Trading Commission in January and is seen as the only real challenger to Chicago-based CME Group, which derived about half of its average daily volume from interest-rate business in Q2. Asset managers and leveraged funds use Treasury futures to express directional views on the yield curve and duration.

Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about the launch of a new interest-rate futures exchange by BGC Group and its competitors, including details on the types of contracts traded and the potential impact on the market. It also includes quotes from industry experts and rival CEOs discussing the challenges and opportunities for the new exchange.
Noise Level: 3
Noise Justification: The article provides relevant information about the launch of a new interest-rate futures exchange by Howard Lutnick’s company, BGC Group, and discusses the potential impact on the market. It also mentions the competition with CME Group and includes quotes from industry experts. However, it does not delve into any in-depth analysis or provide actionable insights beyond stating that major banks want an alternative to reduce transaction costs and systemic risk.
Public Companies: CME Group (CME), Bank of America (BAC), Barclays (BARC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), Wells Fargo (WFC)
Private Companies: BGC Group,Citadel Securities,Jump Trading Group,Tower Research Capital
Key People: Howard Lutnick (Head of Cantor Fitzgerald and BGC Group), Terry Duffy (CEO of CME Group), Edward von der Schmidt (Founder of Datum Research)

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Financial Relevance: Yes
Financial Markets Impacted: Interest-rate futures market, CME Group, major banks and investment firms
Financial Rating Justification: The article discusses the launch of a new interest-rate futures exchange by Cantor Fitzgerald and BGC Group, which will compete with CME Group. This development has implications for financial markets and companies involved in the interest-rate futures market, such as CME Group and major banks and investment firms backing the FMX Futures Exchange.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses the launch of a new futures exchange and the competitive landscape in the financial sector, but it does not mention any extreme event that occurred in the last 48 hours.·
Move Size: No market move size mentioned.
Sector: Financial Technology
Direction: Up
Magnitude: Large
Affected Instruments: Stocks, Interest-Rate Futures

Reported publicly: www.marketwatch.com