#United States #Chicago #CME Group #U.S. Treasuries #BrokerTec

CME Group's New BrokerTec CLOB Launch in Chicago

In a significant move for financial markets, CME Group, recognized as the world's leading derivatives marketplace, has announced the upcoming launch of a second BrokerTec Central Limit Order Book (CLOB) dedicated to U.S. Treasuries. This innovative platform is set to debut in Q3 2025 and will be strategically located in Chicago, alongside CME Group's well-established U.S. Treasury futures and options markets.

Mike Dennis, the Global Head of Fixed Income at CME Group, emphasized the importance of this launch, stating, "As clients navigate this period of heightened uncertainty and record debt issuance, U.S. Treasury spread trading continues to drive price discovery and liquidity across cash, futures, and repo markets." This sentiment highlights the necessity for a unified trading approach that the new CLOB intends to provide.

The introduction of the Chicago CLOB is particularly timely as market participants face unique challenges in the current economic landscape. Clients have historically had to manage the complexity of executing relative value strategies across markets in New York and Chicago, which increases the risk of misalignments. John Edwards, Global Head of BrokerTec, noted that the new CLOB aims to simplify this dynamic, enhancing the overall client experience in cash versus futures strategies.

One of the key features of the new platform is its ability to facilitate smaller notional sizes and adjust minimum price increments. This allows even smaller firms to engage in spread trading, effectively broadening and deepening the liquidity pool available to all market participants. With the recent record of $1.05 trillion in average daily notional volume recorded by BrokerTec on March 3, 2025, the demand for streamlined trading is evident.

The Chicago CLOB will enable clients to trade all seven on-the-run benchmark U.S. Treasuries, setting tighter price increments of 1/16th of a 32nd. This adjustment is crucial for precise hedging practices, aligning more closely with the already established futures market standards.

Available on the CME Globex platform, this new trading venue will leverage the existing BrokerTec API, ensuring that clients can seamlessly connect and access its capabilities through their current CME Group connectivity. Client testing for this innovative platform is set to commence on April 27, 2025, which positions CME Group at the forefront of enhancing market efficiency.

Notably, BrokerTec's existing CLOB in New York will remain the primary venue for price discovery in cash U.S. Treasuries, which posted an impressive average daily notional volume (ADNV) of $113 billion in February 2025. The launch of the Chicago CLOB is expected to complement the New York-based platform by focusing primarily on relative value strategies and providing additional avenues for liquidity.

As the financial landscape continues to evolve, CME Group remains dedicated to innovation and efficiency in trading solutions, ensuring that both individual and institutional clients can manage risk effectively and seize emerging opportunities in dynamic markets. The CME Group's wide range of products based on interest rates, equity indexes, foreign exchanges, and various commodities underlines its crucial role in the global financial system.

As market dynamics evolve, the anticipation surrounding the BrokerTec CLOB launch reflects a broader trend towards integration and efficiency in trading practices, promising a new era for U.S. Treasury trading.

For further details on this launch and other CME Group offerings, visit CME Group Official Website.