The world's leading Derivative exchange CME Group suddenly suffered an outage, paralyzing a series of important Futures Contract in the global financial market for many hours. The problem occurred on the currency trading platform and some key futures markets, including energy, commodities, US Treasury bonds and stock indexes, causing the price data stream to freeze and many brokers were forced to withdraw products from trading boards.
According to an announcement from CME Group, the initial cause was determined to be a cooling issue at the data center system of CyrusOne - one of CME's major infrastructure partners, operating more than 55 global data centers, from the US, Europe to Japan. CME said they are working to fix it as soon as possible, although they have not given a specific time frame. CyrusOne has not yet responded to a request for comment.
It wasn’t just the Futures Contract market that was affected, with the EBS forex trading platform – owned by CME and a key system for trading major currency pairs like EUR/USD and USD/JPY – also having to be temporarily suspended due to a technical error. Data from LSEG showed that prices for WTI oil, US Treasury Futures Contract , S&P 500 Futures Contract , palm oil and gold were all not updated during the outage.
While spot forex traders can quickly move to other platforms, Futures Contract brokers are left largely in the dark due to the lack of live pricing data. Christopher Forbes, head of Asia and the Middle East at CMC Markets, said he had never seen such a large-scale trading outage in his 20-year career. Forbes candidly Chia that the company was forced to halt trading on a number of commodity contracts, and had to use internal data or its own calculations to provide temporary prices to clients and even other brokers. Self-pricing in this situation is considered high risk, which can lead to strong market volatility as soon as trading reopens.
Futures Contract are a core instrument in global financial markets, used to hedge, speculate and take positions on a wide range of assets. A major disruption like this could have a ripple effect, especially given the volatility of the past month in commodities and equities.
