Stuart Williams, president of ICE Futures Europe, said regulatory and macro-economic trends are putting some wind behind its interest rate complex, a welcome sign for a market that stagnated during the post-2008 crisis. Speaking with John Lothian News at the FIA IDX conference in London in June, Williams said industry adoption of MIFiD 2 rules beginning in January, rising interest rates and the uncertainty of Brexit should continue to bolster volumes in these markets in the coming months.
“It’s been the combination of political uncertainty in the UK not only driving Sterling, but also Europe, which has been driving our euro denominated products and changes in monetary policy,” Williams said. “The interest rate cycle is now coming out of the doldrums.”
ICE Futures Europe posted a record volume on May 29 in ICE’s Interest Rate complex, with record daily volume of 7.8 million futures and options contracts topping the previous record of 6.2 million contracts set on May 6, 2010. Year-to-date volume in ICE’s interest rate complex is up 13 percent, with open interest up 5 percent over the previous year.
The exchange is also pushing its LIBOR contracts and alternative reference rates such as its 1-month SONIA contract, launched last December, and a 3-month contract listed on June 1.
“Our job is not to pick a winner,” Williams said. “We think there is a future for LIBOR but we also think there is interest in alternative reference rates.”
Produced by Mike Forrester
Interview by Jim Kharouf