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The CME: Key Facts
A CME Group outage on Friday stopped trading in its popular currency platform, as well as futures covering foreign exchange, commodities and Treasuries. CME stated in a press release that the problem at CyrusOne's data centres was caused by a cooling issue. It added it was working on a "near-term" resolution, but did not provide any further details. The CME is a great place to trade. Futures are an important part of the financial markets. They're used by traders, speculators, and businesses who want to hedge their positions or take positions on a variety of assets. CME reported earlier this month that the average daily derivatives volume in October was 26.3 million contracts. CME offers options and futures on commodities, interest rates and equity indexes as well as foreign exchange and cryptocurrency. The Chicago Mercantile Exchange was created through the merger of four major U.S. markets. It now has four main entities: Chicago Board of Trade, New York Mercantile Exchange, and COMEX. CME Globex offers global access to trading via electronic means. IMPACT BY ASSET CLASS: ENERGY & FUELS The halt affects energy markets by freezing options and futures on key benchmarks, such as NYMEX West Texas Intermediate crude (WTI), Henry Hub natural gas and NY Harbor ULSD heater oil. CME says that WTI Light Sweet Crude, the world's most-liquid crude oil contract, is traded daily by more than one million WTI Futures and Options. CME reports that around 400,000 Henry Hub Natural Gas futures are traded each day. NY Harbor ULSD Futures represents more than 180,000,000 barrels of trading per day. These contracts are essential for producers, refiners, and traders in order to manage the supply chain and hedge against price risk. SOFT AND HARD COMPOUNDS - AGRICULTURE The trading halt disrupted the price discovery process and hedges in agricultural markets. This is a core CME offering. The contracts listed include: Cotton, lumber, and softs. Grains and oilseeds are also included. When trading is paused, investors, producers and processors lose access to benchmark hedge tools. Metals CME's Metals Complex includes precious metals such as gold, silver, platinum and palladium, and base/ferrous materials like copper. COMEX gold futures are an important benchmark for determining global gold prices and hedging portfolios. EQUITY INDEX CME offers equity index futures and option contracts linked to major benchmarks, including the S&P 500 and Nasdaq 100, Dow Jones and Russell 2000. It also lists international indices, such as Nikkei 225 and Micro E Mini, and E-mini and Micro E mini variants. Asset managers, hedge fund and proprietary traders use these products for index-level positioning and tactical hedging. Interest Rates, Fixed Income and Foreign Exchange CME's interest rate suite includes benchmark futures and option on SOFR, Fed Funds (U.S. Treasury Notes and Bonds), U.S. Treasury bonds and notes, and other short-term rate. The FX complex of the company offers listed options and futures on major and emerging market currency pairs. Cash FX is also traded via EBS, which is a popular platform for cash FX and other spot products. According to LSEG, the prices of futures on U.S. 10-year Treasuries stopped updating, and the prices on EBS were also frozen, temporarily complicating currency and rate hedging by banks, corporations and asset managers. CRYPTOCURRRENCIES CME offers institutional users regulated cryptocurrency options and futures, including Bitcoin and Ether. It also provides crypto indexes and reference rates. This is one of the most popular exchange-traded and centrally cleared methods for hedging major digital assets. WEATHER CME operates a weather derivatives market with futures and option linked to Heating Degree Day indices (HDD) or Cooling Degree Day indices (CDD), and other temperature-based standards for U.S. These contracts are used by utilities, energy companies and other businesses that are sensitive to weather changes in order to protect their revenues and costs. Reporting by Sherin Varghese in Bengaluru and Noel John, Editing by Ros Russel
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Germany asks EU to relax the hard cap on combustion vehicles from 2035
Friedrich Merz, the German Chancellor, said on Friday that he will send a letter asking the European Union Commission to reconsider EU rules which effectively stop sales of new cars emitting carbon dioxide in 2035. This would allow for greater technological openness. The conservative chancellor, who has been in agreement with Germany's car industry for years, which faces stiff competition from China on the issue of phasing-out combustion engines and switching to electric vehicles, believes that this timeline is unrealistic. The Social Democrats, his junior coalition partner party, were more divided in their views. Merz stated that the coalition government had agreed on Thursday to request exemptions from the EU for plug-ins hybrids and highly effective combustion engines. Merz described the automotive industry's current state as "precarious" and said that everyone was aware of it. Merz said that Germany was committed to climate protection and that it wanted to preserve jobs in Europe, especially the German auto industry. Merz's note to Brussels outlines Berlin's position at a time when the Commission, which is the EU's executive arm, will be revealing plans to boost Europe’s automotive industry on December 10. Merz, underlining a commitment to the EV Revolution, said that the coalition has also agreed to launch a subvention programme to help households with low and medium incomes purchase or lease an electric or plug in hybrid vehicle. According to a paper by the coalition, a basic subsidy is set at 3,000 euros. This will increase to 1,000 euros for each child up to a maximum. According to the paper, the programme should begin as soon as next year. It was not enough, however, to quell criticism from groups such as Transport & Environment who accused Berlin of clinging to the past by making a decision that would worsen the carmakers' problems. Sebastian Bock, T&E Germany's chief, said that anyone who believes Germany can create jobs and value in the future using combustion engine technology is blind to reality. (Reporting and editing by Thomas Escritt, Emelia Sithole Matarise and Emelia Rinke; Reporting by Sarah Marsh and Andreas Rinke)
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Fed's cut-bets help shares end November with a firmer footing
The global stock market entered a volatile final session on Friday as an outage in the exchange operator CME Group caused trading to be halted on a wide range of futures contracts on currencies, commodities and Treasuries, further reducing liquidity. The power outage Investors from the United States were due to return after their Thanksgiving break for a short session on Friday. The STOXX 600 index in Europe was essentially unchanged for the day. It had gained 0.5% during November, its lowest monthly performance since June. The S&P 500 will experience its first monthly drop since April. It fell 0.4% in November. However, it recovered from a two-month-low a week earlier, which implied a 5% month-to date decline. Choppy November The global equity markets were unusually volatile in November of this year. Concerns about the sky-high valuations of tech stocks shook the markets, while a U.S. shutdown ended after 43 days. Bitcoin, which is a good indicator of risk appetite among investors, fell 16% in November. Federal Reserve is cautious due to lack of data from government shutdown. However, heavyweights such as Fed Governor Christopher Waller, and New York Fed president John Williams, have expressed support for a cut in rates next month. This has been key to the recovery of stocks. Samy Chaar, an economist at Lombard Odier, said that volatility is usually expected in September and October. We've seen it in November but have recovered the majority of it. "We had estimated a December cut of 30%, but now we are at over 80%. "I think that's a very good reason for the rally at month's end," he said. CME FedWatch shows that Fed funds futures indicate an 85% probability of a rate reduction next month. This is a dramatic change from the 30% chance a week ago. BOJ HIKE IS IN VIEW The dollar gained a little ground against a basket major currencies but was heading for its biggest weekly drop since July. It ended the month almost unchanged. The Japanese yen is flat at 156.37 to the dollar after rebounding from last week's 10-month-low of 157.9. Investors await the Japanese government's intervention after weeks of verbal browbeating to stop the currency's slide. The data showed that Tokyo's core consumer prices rose by 2.8% from November of last year, which was above the forecasted 2.7% increase. This is just one of many data points that has kept the bets on a Bank of Japan rate hike alive. Markets are now pricing in a rate hike by the BOJ as early as next month. As the yen fell and political pressures faded, more BOJ board members have signalled a rate hike. In a note, MUFG strategists stated that "today is also the end of the month and FX performance will often be determined by these less predictable flows." This week, the Aussie and kiwi have both seen big gains, with each up by 1.1% and 1.8%. Markets bet on the fact that rate-cutting cycle in both countries is nearing its end. The minutes of the European Central Bank meeting show that policymakers were also not in a hurry to lower rates. The euro slipped 0.2%, to $1.157. This represents a 0.3% gain for the month. OIL, GOLD Up The U.S. was pushing for a peace plan to end the Ukraine conflict, which led to a rise in oil prices on Friday. Brent crude futures increased 0.3% to $63.55 per barrel, after falling 2.3% in November. The spot gold price was up by 0.2% to $4,166 per ounce. This brings the monthly gain to a whopping 4.5%. However, they are still a long way from the record high $4,381.
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Sources say that India's Jayaswal Neco is switching to lower cost funding instead of high-cost bonds
Two sources confirmed on Friday that India's Jayaswal Neco was refinancing its high-yield debt by combining it with lower-cost term and working capital loans. The company also wants to obtain new facilities worth about 22 billion rupees (about $246 million). One source said that the new borrowings will have an interest rate of 12.50%. This is significantly lower than the current coupon of 17.50% on the high-yield bonds. The term loan is likely to have a duration of six years, with a call-option after about 20 months. One of the sources stated that the deal would be completed by the end of the first quarter of December. A term loan will likely have a duration of six years with a call-option after 20 months. Sources could not be identified as they were not authorized to speak with media. Jayaswal didn't immediately respond to an email asking for comment. Sources said that a rating upgrade from India Ratings, to BBB+, has enabled the company to secure lower funding. The rating agency stated that "the rating reflects Ind-Ra’s expectations of JNIL’s improved operational profile and financial profile in the FY26 due increased capacity utilization and higher sales volume."
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Indonesian town burys its dead in mass graves as flood toll increases
Families in Indonesia gathered on Friday at a Batang Toru health centre, hoping to hear news of missing loved ones. Locals were digging a mass grave for seven victims who had not been claimed by their families. The cyclonic rains which have ravaged the westernmost island of Sumatra, Indonesia, are believed to be responsible. According to Indonesian disaster agencies, the rains caused flooding and landslides across three provinces on Sumatra Island, killing at least 95 people. Nearly 80,000 have been evacuated, and 80 people remain missing. Residents of Batang Toru, where 21 people have died, lifted seven bodies wrapped in black plastic from the back a truck and placed them on a large plot of land owned by a state-owned plantation company. An excavator then dumped dirt clumps to bury them all in a mass grave. Mara Tinggi said, "We found 21 dead bodies in a hospital... seven of them will be buried." Batang Toru is in North Sumatra, the province that was the hardest hit. Residents said there is no morgue where bodies can be stored until loved ones arrive. The smell of decomposing bodies was so strong that many people at the health center, which is surrounded by fallen trees, had their noses covered. Indonesian authorities have rushed to act in response to the worst floods and rains that the region has seen in many years. The death toll in the past 24 hours has increased dramatically, and officials are concerned that it could rise further. The disaster mitigation agency stated that road access is minimal, and critical infrastructure including power and communication has been severely damaged. The agency reported that the search for missing persons continued on Friday. Authorities are working to restore electricity and clear roads blocked by landslide debris. Ilham Wahab is the spokesperson of the local search-and-rescue agency. He said that in West Sumatra there are still over 100 people stranded at home, waiting for help. 183 people have been killed by floods in Southeast Asia. These also affected Thailand and Malaysia. (Reporting and writing by Yudhistira, Batang Toru. Editing and editing by Gibran Peshimam.
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ASIA GOLD - High gold prices are driving demand in major Asian hubs
The demand for gold was muted across the major Asian markets during this week. High prices slowed retail purchases even as India began its wedding season. In China, the elimination of tax exemptions on gold purchases lowered consumer interest. This week, Indian dealers offered a discount The discount is now up to $18 an ounce, inclusive of import duties and sales taxes. This is a smaller discount than the one of last week of up $21. On Friday, domestic gold prices traded at around 126.100 rupees for 10 grams, an increase of 4.4% over the previous week's lowest price of 120.762 rupees. "Buyers have been waiting for a price correction because they are uncomfortable with the current prices. This has made demand weak," said Ashok Jain of Mumbai's Chenaji Narsinghji, a gold wholesaler. Mumbai-based bullion dealers with a private banking firm said that jewellers have also held off on building up stocks for the wedding season as footfalls in their stores has dropped after a spike during Diwali. In India, weddings are the main reason for gold purchases. Jewellery is a popular gift given by families and friends and is a part of bridal wear. The spot gold price rose on Friday. It was poised to reach a fourth consecutive monthly increase, thanks to bets placed on the Federal Reserve's decision to cut interest rates in December. However, an outage on exchange operator CME Group stopped futures trading. Bullion prices in China, the world's largest consumer of gold, ranged from a premium as high as $1.40 per ounce to discounts up to $16 per ounce when compared to the global benchmark spot rate. Peter Fung (head of trading at Wing Fung Precious Metals) said that people are still concerned about the tax exemption in China. Beijing has cut the value-added taxes for certain gold purchases through the Shanghai Gold Exchange or the Shanghai Futures Exchange. This is expected to increase the cost of gold used for jewellery and industrial purposes. In Singapore This week, gold in Hong Kong was sold at a par premium of $2.50. Hong Kong Gold Traded at par, a $1.80 premium is added. In Japan, bullion The spot price was met. Reporting by Brijesh Patel in Bengaluru, and Rajendra Jadhav from Mumbai. Editing by Eileen Soreng
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Iron ore gains third week on Infrastructure Demand
The price of iron ore futures fell on Friday but recorded their third consecutive weekly gain due to recent infrastructure demand. The day-traded contract for January iron ore on China's Dalian Commodity Exchange closed 0.19% lower, at 794 Yuan ($112.18) per metric ton. The contract rose 1.14% in the past week. As of 0717 GMT, the benchmark December iron ore traded on Singapore Exchange was down 0.89% at $105.75 per ton. The contract has gained 1.73% in the first week. Galaxy Futures, a Chinese broker, says that infrastructure demand has been increasing recently. Prices are expected to follow fundamentals on the short-term. Data from Chinese consultancy Mysteel shows that inventories of five major carbon steel products held in Chinese steel mills fell for the seventh consecutive week by 2.5%, to 3.9 millions tons as of Thursday. This is the lowest level seen since late January. SteelHome data shows that the total stockpiles in China of iron ore dropped by 0.42% on a week-on-week basis to 139 million tonnes as of November 28. According to Chinese broker Everbright Futures, on the supply side shipments from Australia and Brazil, two of the top producers, both declined, while the total number of ships at port decreased by 8 months. Iron ore futures have been softened by concerns over China's real estate sector. However, losses were minimal as Bloomberg reported analysts at ANZ that policymakers may roll out new support measures. Coking coal and coke, which are used to make steel, also lost ground. They fell by 0.79% and 1,99% respectively. Galaxy's note said that increased coal supply, as well as the accumulation of coal mine inventory, has led to a recent decline in prices for coking coal and coal coke. The benchmarks for steel on the Shanghai Futures Exchange are mostly in positive territory. Rebar gained 0.71%. Hot-rolled coils climbed 0.27%. Wire rod gained 0.33%. Stainless steel fell 0.32%. ($1 = 7.0777 Chinese yuan). (Reporting and editing by Rashmi Liew, Subhranshu sahu and Rashmi aich)
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As the number of flood-related deaths in Southeast Asia crosses 180, rescuers are stepping up their recovery efforts.
As the flood waters receded, authorities began coordinating recovery efforts, rescuing stranded residents, restoring power and communications, and rescuing stranded citizens. A rare tropical storm has formed in the Malacca Strait, causing torrential rainfall across large parts of Indonesia and Malaysia. Authorities said that a cyclone killed 46 more people in the island nation of Sri Lanka. According to three Indonesian provincial authorities, by Friday afternoon 94 deaths had been confirmed in the badly affected Sumatra. Search and Rescue personnel were still unable to reach residents in the Padang Pariaman area of Sumatra on Friday, where 22 people had died. Residents had to deal with water levels of at least one metre. "We are running out of food and supplies," said Muhammad Rais a resident of 40 years old who was forced on Thursday to move up to the second level of his house to escape rapidly rising water. Abdul Muhari said that communications remained down on the island in certain areas, while authorities worked to restore power, clear roads blocked by landslide debris and restore communication. He added that Indonesia will continue airlifting aid and rescue personnel to the affected areas on Friday. THAILAND TOTAL DEATH REACHES 87; TOURISTS EVACUATED In a press release, the Thai government confirmed that floods had killed 87 people in eight provinces of the south. The Thai government said that more than 3.5 millions people were affected. Hat Yai in southern Thailand was the worst hit. Although the rain stopped, residents were still knee-deep under floodwaters and many had no electricity to assess the damage they'd done over the past week. One man said that he "lost it all". Some residents claimed that they had been spared from the worst floods, but still suffered the effects. Somporn, 52 years old, said that the floods affected her in all aspects. "My house wasn't inundated, but I felt like I was trapped on an island as I couldn't get anywhere." Tropical storm Senyar, which made landfall in Malaysia at midnight, has since weakened. Meteorological authorities continue to prepare for heavy winds and rain, while warning that rough seas can pose a risk for small boats. Shelters are still holding a total of 30,000 people, down from 34,000 people on Thursday. Malaysia's Foreign Ministry said that 1,459 Malaysians had been evacuated from more than 25 hotels in Thailand. It added that it was working to rescue the 300 Malaysians still trapped in flood zones. Reporting by Stanley Wisianto, in Jakarta; Yudhistira, in Medan; Danial Azhar, in Kuala Lumpur; Panarat Thepgumpanat, in Bangkok; Thomas Suen, in Hat Yai. Writing and editing by David Stanway.
UN: Mediterranean and Black Sea fish stocks are recovering, but threats still persist
In a report released on Friday, the U.N. Food agency stated that the fishing pressure in the Mediterranean Sea and Black Sea had dropped dramatically over the last decade. However, just over half the assessed fish populations are still overfished, and climate change threats continue to grow.
The Food and Agriculture Organization in Rome said that sea fishing and aquaculture in salty or partially-salted coastal waters produce about 2,06 million tonnes of food per year, worth $21.5 billion, and support 1,17 million jobs.
The FAO's biennial report stated that the average overall fishing pressure had fallen by 50 percent since 2013. Meanwhile, the percentage of stocks being fished at sustainable levels has increased thanks to better management and reduced fishing pressure.
'STOCKS NOT YET WHERE WE WOULD LIKE THEM TO BE'
Despite this, 52% are classified as overexploited. In parts of the Adriatic and central-eastern Mediterranean, incidental catches of sharks and sea tortoises pose a serious problem.
"Stocks have not reached the level we'd like, but are starting to recover, thanks to strong stakeholder engagement and science-driven management actions. Aquaculture is also proving that it can meet future demands for aquatic food," said Manuel Barange.
In 2023, the Mediterranean and Black Sea fisheries caught a total of 1,12 million tonnes wild-caught marine animals and fish, an increase of 13% over 2022, but a relatively stable amount for the last decade.
Turkey was the top fishing nation with 31% of landings, and 17% of total fleet capacity. Italy and Greece were next.
In 2023, aquaculture in the region will produce 2.97 million tonnes worth $9.3billion, of which 940,000 tonnes are produced in semi-salted or salty waters.
The report stated that aquaculture is under increasing pressure due to heatwaves and disease outbreaks. Non-indigenous species, complex licensing and legal structures, and non-indigenous species can all deter investment.
The report stated that to meet the projected demand of 2050, and ensure that countries in the region achieve the global average per capita consumption for aquatic foods, which is 20.7 kg (45.56 lb), in 2022, production will need an increase between 14%-29%. (Writing and editing by Conor Humphries; Crispian Balmer)
(source: Reuters)