The newly launched
interest rate futures contract as well as the awaited introduction of a STRIPS market is expected to complete the width of products available to clients.
5 /PRNewswire-FirstCall/ -- CME, the world's largest and most diverse financial exchange, today is celebrating the 25th anniversary of its benchmark
interest rate futures contract, CME Eurodollar futures.
CME Eurodollar futures are the world's most actively traded
interest rate futures contract and serve as a benchmark for investors worldwide.
futures exchange, today announced that it will launch weekly expirations on the One- Year Mid-Curve options on CME Eurodollar futures, the world's most actively traded
interest rate futures contract.
Last month, India's central bank took action to reverse that, announcing it would introduce 10-year
interest rate futures contracts by the end of the year.
traded
interest rate futures contracts already cleared by NYPC, fixed income cash and repo trades cleared by the DTCC's Fixed Income Clearing Corporation (FICC) and interest rate swaps cleared by LCH.
Similarly, it is believed that yields on short-term
interest rate futures contracts might rise on speculation that policy makers would lift their overnight interest rate by 0.
Prices for US
interest rate futures contracts showed dealers scaling back bets on further rate cuts, implying no more than a 50-50 chance the Fed will lower rates again in December, down from a perceived 64 per cent on Tuesday night.
For more than a decade, trading volumes in these contracts remained miniscule in comparison with other
interest rate futures contracts, such as 3-month eurodollar and long-term Treasury securities.
Fed funds futures are
interest rate futures contracts that are based on the monthly average fed funds rate for each month traded.
Moreover, as suggested by implied yields on
interest rate futures contracts, market participants had come to expect that the Federal Reserve would ease the federal funds rate as much as 50 basis points by year-end and that the Bank of Japan might ease call rates again but by a smaller increment (roughly 25 basis points).
Although numerous uses of
interest rate futures contracts exist for life insurers, this analysis will be limited to three: portfolio management, future cash flow management and life policy management.
