SINGAPORE/LONDON, Nov 28 (Reuters)
There has been a significant outage at CME Group, the world’s largest currency operator, which has impacted its currency platforms and halted futures trading in various sectors, including foreign exchange, commodities, government bonds, and stocks. As a result, some benchmarks are currently inaccessible, leading brokers to withdraw certain products from the market.
CME reported that the outage stemmed from a cooling issue at the CyrusOne data center. They mentioned they are actively working on a solution but did not provide further specifics.
Several brokerages in Europe have indicated they cannot offer trading for specific products tied to certain futures contracts.
CyrusOne, based in Dallas and managing over 55 data centers across the U.S., Europe, and Japan, did not respond to inquiries from Reuters for comment.
Difficulty trading without live prices
CME claims to be the biggest exchange operator by market capitalization, providing a comprehensive suite of benchmark products, including rates, stocks, metals, energy, cryptocurrencies, and agricultural commodities. The company first disclosed its outage on its website at 0240 GMT.
As of 0720 GMT on Friday, prices for key stocks like West Texas Intermediate crude oil, 10-year U.S. Treasuries, S&P 500, Nasdaq 100, Nikkei Stock Average, palm oil, and gold had not been updated, according to LSEG data.
Prices on the EBS foreign exchange platform were also stagnant. In October, this platform typically saw trading volumes reaching about $60 billion daily in major currency pairs like EUR/USD and USD/JPY. While spot Forex traders found alternative venues for executing trades, many brokers felt uneasy trading contracts without live pricing.
“Honestly, this is just a pain in the neck,” remarked Christopher Forbes, head of Asia and the Middle East at CMC Markets, noting that he hadn’t witnessed a currency suspension of this scale in 20 years.
CMC has withdrawn trading in numerous commodity contracts, opting to depend on its internal data and calculations to determine pricing for clients and other brokers. “We are now assuming a lot of unnecessary risks to continue pricing,” Forbes stated. “I think the market is going to react unfavorably to this, and volatility is likely in the near future.”
Reduced trading after Thanksgiving
Futures play a crucial role in financial markets, utilized by dealers, speculators, and companies aiming to hedge or maintain positions in various underlying assets. CME announced earlier this month that the average daily trading volume in derivatives for October was recorded at 26.3 million contracts.
This situation isn’t without precedent, yet it definitely deviates from the normal operations expected from a platform that all participants are reliant on, remarked Michael Brown, a senior market researcher at Pepperstone, concerning the overall market and not just his firm’s operations.
“If such an incident were to occur, today would probably be the least impactful day, considering the thin trading volumes due to Thanksgiving,” he added.
Brokers like Saxo Bank informed their clients that they couldn’t provide contracts for difference, a derivative product for retail traders linked to futures and indices. Another brokerage, XTB, similarly announced a suspension of trading in various U.S. indexes, government bonds, and commodity futures.
This latest suspension by CME occurs more than ten years after technical problems led to the suspension of electronic trading for some agricultural contracts back in April 2014, effectively forcing traders back to the field. Most recently, in 2024, a failure at LSEG and the Swiss exchange operator caused a brief market disruption.
