Leveraged Loan futures are coming September 14*
The U.S. leveraged loan market has rapidly grown to rival the high-yield bond market in size. Yet, unlike high-yield bonds, leveraged loans lack a standardized derivatives market – forcing participants to rely on capital-intensive OTC Total Return Swaps (TRS) or less-efficient ETFs.
CME Group is launching S&P UBS USD Liquid Leveraged Loan Index futures (LVE) to fill demand for hedging, offering superior capital efficiency and operational simplicity.
Key features
Same underlying index as standardized iBoxx TRS
Centrally cleared, not subject to the Uncleared Margin Rules (UMR) that apply to TRS traders
Margin offsets vs. Credit, Treasury and Equity Index futures
Builds upon the rapidly growing CME Group Credit futures ecosystem
Fed Funds futures see historic OI levels
August Fed Funds futures (FFQ6) reached the highest open interest (OI) peak of any Fed Fund futures contract in history, as limited forward guidance, conflicting data and ongoing oil-driven inflation fears eroded market consensus.
Positioning was supported by deep liquidity with trading activity of over 1.7M contracts on the day of FOMC communication (July 29), culminating in the fifth-highest volume day of all time.
FedWatch pricing is one rate hike in 2026
According to FedWatch, the market is pricing in just one rate hike for the remainder of 2026. Before the Fed meeting on July 29, the market was pricing in two.
With inflation control now central to Warsh’s policy, market expectations for a single rate hike by year end have increased, a sharp contrast to the cutting cycle priced earlier in the year.
More in Interest Rates
ICYMI: Treasury Link coming soon
Say goodbye to legging risk on Treasury basis trades.
Starting in Q4,* Treasury Link will seamlessly connect Treasury futures and BrokerTec cash Treasuries via a single, atomic spread on Globex.
2-Year options breach 100K average daily volume
The short end of the curve continues to be hot, with 2-Year Treasury options crossing 100K average daily volume (ADV) milestone YTD, up 92%.
Average daily open interest (ADOI) reached 770K contracts as of July 30, +117% YoY.
Maximizing fixed income capital efficiencies
Swaps-futures portfolio margining continues to see rapid adoption from clients, with daily savings levels surpassing a new record of $12.5 billion in July.
Additionally, with the CME-FICC Customer Cross Margin Program now live, clearing member firms are actively working to onboard so that their clients can unlock up to 80% savings on their eligible offsetting positions at each CCP.
Demand surges for Treasury Weekly options
Weeklies have firmly established themselves as a core liquidity engine for event-driven trading. Demand for rate exposure continues to increase with Treasury Weekly options ADV increasing to 667K contracts, +13% and OI ballooning to 1.7M, +36% YTD.
Notable growth in Tuesday (+98% YoY) and Thursday (+152% YoY) Weekly options.
Rapid increase in T-Bills OI
T-Bill futures OI increased 80% in mid July to over 5K contracts. The increase happened over two trading sessions and has remained steady since.
The continued elevated issuance from the Fed has forced market participants to build hedges.
Data as of July 31, 2026 unless otherwise specified
*Pending regulatory review
View an archive of the Rates Recap online at cmegroup.com/ratesrecap.
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