MARCH 2018 - CURVEGLOBAL NEWSLETTER
CURVE POINTS | MARCH 2018 ![]() Hi all, We’re bubbling with excitement at CurveGlobal as growing market share is deepening and broadening our markets. As you will read in this month’s newsletter, building on the price improvements we’re already delivering, following your feedback we’ll soon be launching CurveGlobal® Three Month SONIA Futures, and reducing the tick size from 1 tick to ½ a tick in the Three Month Sterling Futures contract. Our passion for making a real difference for participants is generating tangible trading efficiencies and more competitive markets for you the market. So while traditionally futures markets have been thought of as “winner takes all,” clearing CurveGlobal futures and margining these alongside swaps at LCH allows us to challenge this paradigm and liberate Rates markets for you, the trading community. As always, our mission remains to return control of open interest to you and deliver all the benefits you get from meaningful competition. Last week a few of us attended the 43rd FIA International Futures industry annual conference in Boca Raton, Florida where we spoke to a number of you about CurveGlobal. I’ve never (successfully) done speed dating, but, this felt a bit like a futures version of it. The general mood at the conference was overwhelmingly positive, pro-business and pro-opportunities, perhaps the speed-dating equivalent of the three stars! Fortunately, as well as the usual chatter on regulation, Brexit, bitcoin, etc., we got to share the platform and talk more on LIBOR replacement – and the high expectations for our new products and functionality, such as inter-commodity spreads. You heard it here first! Sincerely, STOP PRESS: I've been told that I've won the charity poll we were running. That means I'm taking salsa lessons once Open Interest hits 500,000! ![]() Full Steam AheadWith much of the UK still shivering from the icy blast of the ‘Beast from the East’, it’s hard to believe that Easter is just around the corner. But as the days start to get longer - and, hopefully, warmer - there’s plenty to look forward to. Read on to find out what’s in store at CurveGlobal in the weeks ahead. Jump Ball Customer Partnership Programme (3 April 2018) We’re excited to announce the launch of the CurveGlobal Jump Ball Customer Partnership Programme on 3 April 2018, subject to regulatory approval – our way of rewarding firms who are leading the way in adopting our products. This incentive programme will run for six consecutive quarters and is available to all members, and clients of members, and will award the following:
Parties who wish to participate must formally opt-in by signing the CurveGlobal Jump Ball Programme Opt-In Agreement. To register your interest, please contact LSEDerivativesProduct@lseg.com. Short sterling tick size reduction (23 April 2018) On 23 April 2018 CurveGlobal will implement a reduction in the minimum tick increment on the Three Month Sterling future to 0.005, with a corresponding tick value of £6.25. The change is across all twenty-four expiries. Why the change? This finer price granularity will help you address some of the price components of MiFID II Best Execution. We’re also taking the opportunity to align the contract tick size with the launch of the CurveGlobal® Three Month SONIA Futures contract, which will facilitate the launch of the Inter‑Commodity Spread (ICS). CurveGlobal® Three Month SONIA Futures (30 April 2018) On 30 April 2018 we’re launching the new CurveGlobal® Three Month SONIA Futures and ICS. The SONIA[1] contract is based on the effective overnight reference rate for Sterling (SONIA – Sterling Over Night Index Average), as calculated and published by the Bank of England. This will go live one week after the Bank of England implementation of the SONIA reform. The accrual period will be the contract month’s IMM date to the day before the next IMM date. The ICS: CurveGlobal® Three Month SONIA Futures vs. Three Month Sterling Futures The ICS spread between the new CurveGlobal® Three Month SONIA Futures and the Three Month Sterling Futures will allow participants to trade orders implied from a combination of resting bids and offers in outright markets and/or orders resting in strategy markets. Entering an order into the spread will imply “out” an order into the relevant outright market. Additionally, an implied “in” order is two separate outright orders creating a spread price. The migration to OIS-based contracts is a challenge for financial markets, so with the regulatory momentum behind LIBOR replacement, it’s imperative that there are tight, liquid futures available to participants to manage the OIS/LIBOR spread risk. By enabling our CurveGlobal® Three Month SONIA Futures to be cleared alongside swaps at LCH, participants will not only benefit from greater operational efficiency, but optimal use of capital through planned potential portfolio margining. Q1 Round-up The first quarter of 2018 has flown by. So here’s a quick reminder of how we have started the year... CurveGlobal had an exceptionally positive start to 2018. The long-awaited go-live date for MiFID II on 3 January went very smoothly. CurveGlobal’s Three Month Sterling Futures and Three Month Euribor® Futures have continued their record-breaking momentum by both trading through 100,000 lots of Open Interest. Combined Open interest has grown by 28% this year so far.* CurveGlobal Funding (6 February 2018) At the start of 2018, CurveGlobal secured an additional £20 million in funding from existing Bank and Exchange shareholders. This renewed commitment further demonstrates the confidence our partners have in us and the value that CurveGlobal brings to the market. *Up to and including week ending 17/03/2018. Trade Concept Recent Trade Concept articles have looked at Block Trading using CurveGlobal European Interest Rate Futures. The launch of CurveGlobal® Three Month SONIA Futures and the ICS, both expected in April will extend this coverage.
![]() The CurveGlobal® Three Month SONIA Futures is based on the effective overnight reference rate for Sterling (SONIA- Sterling Over Night Index Average) as calculated and published by the Bank of England.
![]() The Short Sterling pricing is using the half tick which goes live 23rd April. ![]()
Block Trading using CurveGlobal European Interest Rate Futures
Margin – CurveGlobal® Three Month SONIA Futures will be offered alongside existing short-term interest rate futures such as Three Month Sterling Futures and will be margined within the Listed Rates Service at LCH. Potential margin offsets may be available for spread trades between these contracts. Examples provided for illustrative non-reliance purposes only, potential benefits indicated are approximate and may not be realised. Monthly Volumes and OI![]() Team Spotlight 60 Seconds with...60 Seconds with Emily Grimshaw, Business Development and Marketing Manager, CurveGlobal 1. What are you listening to/reading these days? I have just ordered a copy of When Breath Becomes Air by Paul Kalanithi on the back of Catherine talking about it last month. It was recommended to me about a year ago and it’s been on my mind to buy a copy. I generally tend to read Jane Austen’s books over and over again though; I never get tired of Pride and Prejudice and Persuasion. I listen to nearly everything apart from Indie music. But my heart belongs to 80’s music; Madonna, Go West, Level 42, Luther Vandross, Alexandra O’Neal and Wilson Phillips. I am also partial to a bit of cheesy music and I probably shouldn’t admit this, but I went to the album launch party for the group “Steps”! 2. What is the one thing you can’t live without? Biscuits. Anyone who has worked with me over the years will know I love biscuits so much I eat them for breakfast! 3. If you could invite any four dinner guests past or present who would you choose? Jane Austen to discuss the classics, Madonna for a sing-song, Carl Hester MBE to get all his Dressage tips and Charlie Hunnam just for fun. 4. You can do any job for just one day, what would it be? A surgeon. I am trying to decide if it would be a cardiothoracic or neurosurgery. But if I could go back and relive my youth I would work harder at school (and talk less) and get into medical school. 5. Ten years ago, where did you think you would be now? I always thought I would be running a broking desk by now. I never anticipated I would be studying for an Investment Compliance Diploma, and moved over from OTC products to exchange traded derivatives side. I am really enjoying it! Come Visit us HereFIA // IDX - LONDON 2018 To find out more about CurveGlobal or to offer suggestions on improving this newsletter, contact us at +44 20 7797 1055 or info@curveglobalmarkets.com. |