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Trading in futures and options on the CME was halted on Friday following a fault at a data centre, disrupting global equity, bond and commodity markets.
The outage at the CME, the world’s largest derivatives exchange, began late on Thursday in the US and remained largely unresolved eight hours later as markets on Wall Street prepared to reopen after the Thanksgiving holiday.
Investors rely on CME futures to hedge their positions in markets ranging from Treasuries to stocks on the S&P 500, as well as pricing Wall Street indices at the market open.
“The outage is exacerbating already thin liquidity post-US holidays, and on top it’s a half-day for most markets,” said Rushabh Amin, multi-asset portfolio manager at Allspring Global Investments.
In a statement on Friday, the CME blamed the halt in trading on a “cooling issue” at a data centre located 35 miles away from the CME’s headquarters in Chicago and operated by CyrusOne.
The CME added it was working to fix the issue “in the near term”.
By 11.20am London time, prices for futures linked to the S&P 500 index, WTI crude oil and gold had not been updated for several hours, according to data from LSEG and FactSet.
The disruption also hit the CME’s EBS market, one of the world’s largest currency trading venues, and its Chicago Board of Trade subsidiary, which handles trading in interest rate and US Treasury derivatives.
The CME handled an average of 28.3mn contracts a day in the third quarter on futures tied to interest rates, treasuries, energy and equities.
Its last major outage was in 2019, when equity, bond and commodity markets were disrupted for three hours.
Friday’s disruption comes on the final trading day of the month, when many options contracts will expire and traders typically shift their positions into new contracts.
One metals trader said they were “in the dark” and waiting for an update from the CME — including on what would happen to positions in contracts that expire on Friday. The exchange may permit market participants to “roll” forward any such positions to Monday, the trader suggested.
Investors said that the blackout was making banks reluctant to trade in other markets such as bonds, swaps and currencies on Friday morning, pushing up transaction costs.
“If I was trying to do some currency hedging today it would be an issue,” said one fund manager.
Based in Dallas, Texas, CyrusOne operates more than 55 data centres across the US, Europe and Asia. The company is owned by US private equity groups KKR and Global Infrastructure Partners.
CyrusOne did not immediately respond to a request for comment.
CME said on Friday morning its European government bond trading platform BrokerTec EU was open, but its other markets remained shut.
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