CME Announces Latam FX Records

CME Group says its Mexican peso and Brazilian real FX futures contracts hit new highs for open interest (OI) and average daily volume (ADV) in 2023.

The Merc says MXN futures recorded ADV of $1.8 billion of equivalent notional value, while BRL futures hit $300 million per day, no annual percentage gain is provided. The new peaks come amidst higher interest all round for Latam FX products, CME says the complex hit a new high for ADV of 82,000 contracts, a 7.4% increase on 2022, while OI also hit a new high at 304,000 contracts, a20.4% increase year-on-year.

“The continued growth of the Mexican and Brazilian economies combined with the current interest rate environment, is driving more clients to trade CME Group FX futures,” says Paul Houston, global head of FX products, CME Group. “As client participation continues to grow, we are focused on building and maintaining consistent liquidity that will support the long-term development of the electronic FX markets in Latin America.”

Emerging markets appear to be a standout for CME over 2023, the exchange group also announced a record in Taiwan dollar in off-SEF trading at EBS in November. Overall in 2023, CME’s FX futures and options volume drifted 3.4% lower than in 2022.

“CME Group’s liquidity in Mexican peso futures has been a key element to enhance our hedging activities, and thus to be able to heighten our client’s product offering,” says Alejandro Vigil, head of FX BBVA México.

“CME Group offers its clients unique access to liquidity from local onshore market markers which are particularly valuable in futures and options for non-deliverable currencies. These are markets that require cumbersome local vehicles for direct access or higher costs from global market makers,” adds Bernardo Gattass, head of Itaú Unibanco’s options trading desk. “It’s the case for the Brazilian real which is a large market with relevant local liquidity and large local market makers such as Itaú, its largest bank by assets. Many large global institutional investors would do well to add CME Group to their price provider list for Latam currencies and tap into the liquidity of both global and local market makers, such as Itaú for the real and many others.”