CME Group announced its plan to expand its interest rate complex with the addition of Mortgage Rate futures in January 2025, pending regulatory review. These new cash-settled contracts will provide market participants with a precise tool for managing risk across mortgage pipelines, servicing rights, and securities. This marks a significant expansion into the primary mortgage market.
The contracts are the first-ever to be based on the 30-Year Fixed Rate Conforming Optimal Blue Mortgage Market Index (OBMMI), which tracks real-time rate lock data from over one-third of U.S. residential mortgage originations. This unique index provides direct exposure to the latest primary mortgage rate available to borrowers. The partnership with Optimal Blue is crucial for this product.
These Mortgage Rate futures will offer unrivaled margin offsets with CME Group's U.S. Treasury futures, TBA futures, and Eris SOFR swap futures. Soon after launch, the contracts will also be eligible for Portfolio Margining with cleared swaps. This enhances capital efficiencies for clients and provides a comprehensive hedging solution for mortgage market participants.
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