CME Across Asset Classes

Implications: CME has run its slide rule across cash exchanges before but never taken the plunge to acquire one. Equally, it seeks to create partnerships where it can act as a predator and buy out the partner (see my previous analysis on the subject). Sooner or later CME will likely acquire beyond its traditional futures sectors and there is a wealth of deals out there... However, the key thing CME (and other predatory exchanges) need to do in the long term is to diversify beyond US dollar denominated markets.

Analysis: Acquirng NYMEX gives CME a great expansion in various commodity markets (partiularly metals and oil products such as the benchmark WTI futures) as well as these interesting share positions.

IMAREX is pretty modest as a business but freight trading has enjoyed enormous growth in the past couple of years.

MX and with it the merged MX-TSX entity is a handy
foothold into Canada and indeed an equity marketplace too.

The BM&F stake is one example of where CME (and all exchanges with predatory ambitions) must do deals: zones beyond the realm of the hitherto almighty US dollar. In the long term the greenback is not going to be so dominant and therefore the currencies of the likes of the BRIC economies may become much more substantially traded. CME needs exposure beyond the US dollar zone...

The deterioration in relations between the CME and industry body the FIA has been growing for some time. Given that FIA serves a very narrow remit (essentially futures brokers alone - it is not nicknamed "The Futures Intermediary Association" for nothing!). The FIA's annual conference is coming up soon n Boca Raton, Florida and CME are breaking new ground apparently by largely avoiding attending the event. That said, more exchanges may follow suit if the FIA continues with what has been some rather bellicose and narrow interest statements of views...

Meanwhile, CME has lots of opportunities but then again like all exchanges it will face mounting competition on all sides in the coming months and years...