CME: International trading to outstrip U.S.

CME Group Inc., the world's largest futures market, expects faster growth in Europe and Asia than in the U.S. through 2011 and is planning to expand its international business accordingly, a senior executive said.

"I'd expect larger growth coming from offshore trading than from the U.S." this year and next, Bob Ray, managing director of international products and services at CME, said in an interview yesterday. He declined to forecast the rate of expansion, while saying "the U.S. should have a positive return this year."

The Chicago-based company may double its staff in Europe to 250 by 2012 and plans to increase the size of its Singapore office "significantly" by the first quarter of 2011, Ray said during the 31st Annual Buergenstock Meeting in Interlaken in Switzerland. The exchange's average daily volume dropped 20 percent last year even as international trading rose 20 percent, he said. "We are penetrating markets that are less mature for us now."

Futures trading dropped after the credit crisis cut the amount of borrowed money used to trade while short-term interest rates near zero limited the need to hedge with the contracts. CME, which controls 98 percent of U.S. futures trading, is focused on boosting its existing business rather than looking for mergers or acquisitions, Craig Donohue, chief executive officer, said in July.

"We are evaluating a broad range of products for Europe," Ray said. "Some are ancillary products that are tied to our existing contracts and some are specific to the region."

Average daily trading volume at CME climbed 31 percent in the second quarter, led by an 82 percent rise in currency futures and a 38 percent jump in interest-rate contracts, the company said July 2.