Hedge commodities in euros from Monday
Posted by Izabella Kaminska on Apr 15 14:00.
Olivier Jakob, at Petromatrix (who we know we quote a lot, but only because he really does constantly come up with interesting points) alerts us to the fact that from Monday onwards investors will be able to trade euro-denominated contracts on certain Nymex energy products.
As he points out:
Interestingly the CME will start to list on Monday Euro denominated contracts (swap futures) for Brent, ICE Gasoil, N.W.E. High and Low Sulphur Fuel Oil, 10 ppm and 0.1 N.W.E. Gasoil. It will be interesting to see if the Euro denominated contracts for Distillates attracts some interest from European domestic operators for hedging purposes. Missing from the kit in our opinion is a Jet Euro denominated contract.
Obviously, how successful these contracts end up being will depend on their liquidity, and to what degree it remains cheaper (from a bid-ask point of view) to replicate the same position with an old fashioned FX swap.
Nevertheless, the fact that the CME is bothering to list them does suggest some level of market demand exists for euro-denominated energy hedging instruments — presumably mostly from Europe?
That, we would say, is quite interesting.
http://ftalphaville.ft.com/blog/2011...s-from-monday/
Posted by Izabella Kaminska on Apr 15 14:00.
Olivier Jakob, at Petromatrix (who we know we quote a lot, but only because he really does constantly come up with interesting points) alerts us to the fact that from Monday onwards investors will be able to trade euro-denominated contracts on certain Nymex energy products.
As he points out:
Interestingly the CME will start to list on Monday Euro denominated contracts (swap futures) for Brent, ICE Gasoil, N.W.E. High and Low Sulphur Fuel Oil, 10 ppm and 0.1 N.W.E. Gasoil. It will be interesting to see if the Euro denominated contracts for Distillates attracts some interest from European domestic operators for hedging purposes. Missing from the kit in our opinion is a Jet Euro denominated contract.
Obviously, how successful these contracts end up being will depend on their liquidity, and to what degree it remains cheaper (from a bid-ask point of view) to replicate the same position with an old fashioned FX swap.
Nevertheless, the fact that the CME is bothering to list them does suggest some level of market demand exists for euro-denominated energy hedging instruments — presumably mostly from Europe?
That, we would say, is quite interesting.
http://ftalphaville.ft.com/blog/2011...s-from-monday/
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