January Monthly FX Review. A Global Trading Summary of FX Futures and Options Highlights Trends Outlook. h l i g h t s F u t u r e s

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1 h l i g h t s F u t u r e s January 2015 Monthly FX Review A Global Trading Summary of FX Futures and Options Highlights Trends Outlook

2 HIGHLIGHTS & MILESTONES FX Review January 2015 CME FX Futures Volume approaches 900,000 contracts per day, up 18% YoY FX Futures maintained trendline growth in January, up just over 2% from December but over 18% YoY. Open Interest dipped slightly at month-end to ~1.3M contracts, but still seeing robust growth rates in select products. Several futures products are exhibiting strong open interest growth, highlighted by the Brazilian Real s 12 month average growth of 13.6%. EUR, NZD, NOK, SEK, and MXN are all showing OI growth above the G10 average of 2.8% for the same time period. NZD/USD Futures are carrying volume strength from the latter part of 2014 into 2015, posting the 5 th straight month over 20k contracts/day in January. Increased interest may be attributed to the Reserve Bank s leadership in raising interest rates, along with the currency s linkage to volatile commodities prices. 1

3 cmegroup.com/fx HIGHLIGHTS & MILESTONES CME FX Options January ADV regains 100,000 contract level Another volume surge in FX options in January as eventdriven volatility took center stage. Total option volume was up 21.6% MoM and 48.6% YoY, and represented over 10% of total FX volume for the first time on record. EUR/USD options set an all-time record for average daily volume with 64,552 contracts traded per day in January. The total represents a 40% increase MoM and is nearly 2.4x the total for January In addition to EUR/USD, January also witnessed MoM volume growth in CAD/USD, AUD/USD, and GBP/USD options as well, reaching 6133, 6274, and 10,791 contracts per day, respectively. 2

4 FX Review January 2015 January FX Market Focus: The SNB EUR/CHF Exchange Rate Peg On January 15, the Swiss National Bank removed the currency peg that had held the exchange rate between the Swiss Franc and the Euro at a value of for over 3 years. The decision ignited an extremely volatile trading period in the EUR/CHF and USD/CHF currency markets, with exchange rates swinging by over 30% in some markets. During these unprecedented moves, CME s market protection features, such as circuit breakers and velocity logic, were triggered to successfully maintain fair and orderly markets. In contrast to many OTC or cash Source: Bloomberg markets, there were no trade adjustments or trade busts during the period, and trading ranges were much narrower despite the increased volatility and scarcity of liquidity in the wake of the decision. The robust performance of CME Group s markets under such conditions resulted in record volume for all Swiss contracts, reaching over 134,000 contracts on the day, more than 3 times the daily average for The events of January 15 highlight the degree to which event-driven risk has become a hallmark of currency markets, and we hope heightens awareness of the opportunity CME Group products offer to manage risk and capitalize on the volatility central banks and other institutions have introduced into the FX marketplace. With many experts predicting that a protracted currency war of competitive devaluation will unfold across the globe, CME Group s customers know they can turn to us to avoid the noise and leverage a reliable partner for their risk management needs. To learn more about managing event-driven risk with CME FX products, please visit cmegroup.com/fx or fxteam@cmegroup.com. 3

5 cmegroup.com/fx January FX Upcoming Events Watch The month ahead plays host to a number of events and announcements with marketmoving implications for CME Group FX products. See the table below for details. 4

6 CME GROUP HEADQUARTERS 20 South Wacker Drive Chicago, Illinois cmegroup.com CME GROUP GLOBAL OFFICES Chicago New York London Singapore Calgary Hong Kong Houston São Paulo Seoul Tokyo Washington D.C Futures trading is not suitable for all investors, and involves the risk of loss. Futures are a leveraged investment, and because only a percentage of a contract s value is required to trade, it is possible to lose more than the amount of money deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade. All references to options refer to options on futures. CME Group is a trademark of CME Group, Inc. The Globe Logo, CME, Chicago Mercantile Exchange, and Globex are trademarks of Chicago Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. New York Mercantile Exchange and NYMEX are registered trademarks of the New York Mercantile Exchange, Inc. All other trademarks are the properties of their respective owners. The information within this brochure has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in this brochure are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules and specifications herein are made subject to and are superseded by official CME, CBOT, and NYMEX rules. Current rules should be consulted in all cases concerning contract specifications. Copyright 2014 CME Group. All rights reserved. FX314.3/0/0214