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Screenshot of a breaking news alert e-mail from Q2 2017
Sunday is often regarded as a relatively uneventful day for many electronic trading firms, however the Chicago Mercantile Exchange (CME:US) experienced a technical malady yesterday which interrupted its Globex electronic tradng markets for approximately four hours.
According to CME, trading which was scheduled to commence at 5.00pm Chicago time for certain products, was delayed until 9.00pm, with all markets affected except for Malaysian equity-index derivatives.
CME has confirmed that it will cancel all day and session orders, including good-till-date orders which were entered on August 24.
In a controversial comment to Bloomberg yesterday, Evan Lucas, a strategist at IG Ltd based in Melbourne, Australia asserted that “Clients hate it.”
His opinion on the outage is that if clients “couldn’t increase or more importantly shut positions, but there is nothing you can do.”
Institutional participants which use CME to execute client orders were affected, however as it was a Sunday, the outage took place on a day of the week which clearly had less impact than had it been a weekday in which world markets are a hive of activity across the board.
Alluding to this further, Jackson Wong, Hong Kong-based vice president at Tanrich Securities Co stated to Bloomberg “We do a lot of futures, especially CME commodities, so it did affect some of our clients but we did not receive a lot of complaints as the volume was thin.”
“It would be a big deal if it happened during New York hours” he confirmed.
Following the resumption to normal trading, CME did not disclose the exact technical fault that had caused the four hour outage across its Globex markets, however
there was some dissent and an element of frustration from large firms in the Asia Pacific region which were affected by this. Tokyo-based John Gorman, Head of Dollar Interest-Rate Trading for the Asia Pacific region at Nomura expressed the resultant low liquidity with Bloomberg yesterday.
“The liquidity has been absolutely dreadful,” he said. “Both Eurodollar futures and note futures have been closed. Those two markets are very highly intertwined with the Treasury market. I can already see the screens populating with a bit more depth.”
CME Group stated in a press release earlier this month that open interest across asset classes reached a record 103.4 million positions on August 7. Average volume for August was 14 million contracts at that date, up 33 percent from the year-earlier period.