CME (CME) 26 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

John Peschier	executive
Terrence Duffy	executive
Sean Tully	executive
Tim McCourt	executive
Derek Sammann	executive
John Pietrowicz	executive
Richard Repetto	analyst
Daniel Fannon	analyst
Alex Kramm	analyst
Michael Cyprys	analyst
Brian Bedell	analyst
Kyle Voigt	analyst
Alexander Blostein	analyst
Gautam Sawant	analyst
Kwun Sum Lau	analyst
Julie Winkler	executive
Christopher Allen	analyst
Kenneth Worthington	analyst
Simon Clinch	analyst
Andrew Bond	analyst
Sunil Cutinho	executive

Call transcript

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Operator

Hello, and welcome to CME Group Third Quarter 2022 Earnings Call. My name is Sarah, and I will be your coordinator for today's event. Please note, this conference is being recorded. [Operator Instructions]

I will now hand you over to your host, John Peschier, to begin today's conference. you. Thank

John Peschier

facts management on can statements future Other the participate Terry are are I our that start which are language, not statement. made with with this performance. turn Therefore, over may website and are I'm well implied expressed our They any then to you assumptions session. Statements the be in historical will results actual brief call information it are also to difficult for in statements. going in performance the and that is Detailed by the differ website. to the your and of on filings forward-looking These what other factors team questions. on members that guarantees hope morning, our materially doing in Q&A all reference outcomes and SEC, not involve of risks, are about or today. I'll remarks found Good documents from predict. followed uncertainties may our team affect and safe harbor

would am CME job personal go on today last first final XX I Lastly, earnings reconciliation public was joined. retiring after a after between a years the that be of more soon My day release, December will with on than with GAAP the and the earnings CME. On measures. call see plan XX, will my non-GAAP you page as a note, XXXX, I

XXXX, CME has been ultimately it an and journey. of went in amazing December public

who have success. Jamie closely John. I importantly, during CME to Jacks worked to our our and want I shareholders many been of Most George thank and on Dave, particular, this X want CFOs of with journey, created last and whom all a all closely years, I In lot to met have investors. worked with instrumental have our We I've my have for Susan and colleagues with sell-side analysts Jennifer I decades. the for with the thank value

like on run. for are earnings I'd great the successful left been thank has Terry a journey. who and leadership were and I his to XXXX this of Lastly, first CME the in call only ones He

will it that, over to Terry. With turn I

Terrence Duffy

us Well, all quick you, and organization. service said, let with morning, giving organization More and thank you all on to for of the moment as joining decades, take incredible than us this relations an behalf to and a for me of John, shareholder thank X first run. CME a you

from Investor helping an and been the our force marketplace company as to derivatives public outreach, have instrumental us analyst days, Relations you in today. become as leading have You grow our said, we early a

so colleague be leadership. no There As thank for but We you much to your John, you'll you've community, you. throughout nothing behalf our family forward. investor made wish a friend doubt many, and And going on you is you business. Thank again, at and we impact CME the best the of very everybody for significant a your respected on missed. and

John Peschier

Thank you.

Terrence Duffy

in community remaining the members Relations. Investor with good investment leaving We hands the are the of

strategy department and know as well get department. Susan worked Adam all with joined referenced, Relations Minick, entire you'll Jacks, John over George have John coming career who from through As by Jennifer to his as side Investor the recently who side who soon, our

up of Adam. with So forward to you we meeting look all

our Equity on Julie was felt and I quarter morning our provided importantly, to executive have business time which of I is products. released current earlier results, Sunil head Global as commentary we well XXXX. the FX Tim feel our Lynne, Sean, Head and snapshot only business third a year XXXX on Winkler Derek, the to today, extensive but a on to it high and as on this and important financial a such not into finish to call We note. in through strong the more position McCourt, our John, take details of why some of out run expand

and thoughts our before questions. the some and we Tim he for start, our Sean, finishes and open the details open Derek results then with to will will commentary JV. financial then I will provide up will our call Then related John your --

around uncertainty and by start there policy, views Federal the Reserve amount about banks of around of The since foreign our uncertainty the of unwind the recession asset that interest equities in corporate impacts the cascade changes -- exchange valuations in XXXXs be prominently not in most me activity policies at other Let central around is today. with risk Fed's to business. in rate when driving balance tremendous and from classes, uncertainty varied the varying as size world. impact the speed talking seen and about sheet, approaches or uncertainty the with Whether the markets inflation levels taking U.S. rate the

also this committed the relevant do in is uncertainty. our and impact which liquid affecting range invasion the We both given asset of helping markets in manage around we energy seeing world. the our Risk volatility the and business, deeply of to of Russian in and the We Ukraine are broad breadth the management markets, products. globally be level always persist our have our agriculture been likely commodities region across to high disruption and appear of and unique and classes resulting will customers

me QX transition With that let said, performance. into being our

QX performance XXXX solution. our year-to-date of Our effectiveness and for highlights in the management risk

was and management period same XXXX The highest the period in to pandemic. XX% up history year-to-date prior in risk average quarter from up critical of volume CME's QX the -- daily XX% Group's onset Our same the volume at the XXXX when year, pandemic. the last is of versus was

year X first the quarters have this and third highest ADV history. The in second, been fourth of quarters our

of peak So high large far, open this an represents just hit interest that equities in a risk-on again, suggesting XXXX, rate last and week, all-time interest levels our have our holders environment. FX interest with products at rates, products

Additionally, sequential growth year-over-year our quarter fifth QX of in represented ADV. double-digit total

left lives, uncertain potential economics market risk market and pandemic. to our pandemic new also are only the participants global the becoming associated but risk with not part With manage of

focused the work for exchange cash sustained and further pleased long-term transform we the short continue currently and is integration market innovation the with one our will foreign are exchange. doing platform, provide forward. complementing term access breadth on through treasuries the foreign complete XXX% us while partnership, time, cash growing in and existing treasuries to on over business to going opportunity with participants next of built able are We're our the combined The Google growth. assets are we've positioning markets, And on also we to industry-leading a futures

and and Derek, Sean, these detail into then themes. I'll now it turn around to more over Tim dig to

Sean Tully

Thanks, Terry.

growth the strong income With of return rate our businesses. we've activity, interest year-over-year in and seen fixed volatility central bank

options Index jobs ADV play up asset inflation, Futures reading described QX, and and ADV through we've consecutive Rate uncertain and should Consumer quarters X Price and tailwinds Interest continue and for meeting were class. is every in moving Terry the now report every with delivered year-over-year The XXXX. important. XX% in is high FOMC growth double-digit Every

years on XX, rent with clearly day release uncertainty the inflation see this the latest CPI single the could remain as following on very XX ratings here and contracts October for You the These XX for have a trading our with lag interest million economy shelter tend trading to quarters. volumes to led XX% factors rate volumes real short-term the first significant to by complex X up months. and in up could through

their migration with to time, SOFR traded SOFR we Eurodollar more progressed counterparts, Eurodollar trading record now contracts both SOFR day a XX. the than have X.X on this per October reaching During options and futures million contracts

in over different referenced licensed countries of Lastly, in and already derivatives. has $X.X our loans firms and AARC SOFR has XX X,XXX endorsed Term over benchmark OTC trillion been to been

inflation in And the the from are mentioned, as double-digit we futures balance QX QX, then monetary the Treasury larger end On in in sheet becoming with tailwinds and the in Terry to increase be particular Treasury the uncertainty growth had to drives and in government reduction classes. growth QX. have asset strength of have We huge and long debt. long-lasting and Fed other options due uncertainty potential policy and both saw curve, XX% ADV

I'll this point. very Tim to over to it to speak turn

Tim McCourt

the on have led Index indices one interest business us valuation around Equity it's and to benchmark adjustments equity Allow today. global markets pleasure risk and the need foundation where and the our to John, important Thanks, on for me well most expectations strong increased offer be call clock. our XXXX This in positioned management. liquid rate platform to as to the a of deep start strength with access

as ADV highest The Equity record, well the first options first were Index respectively, for Equity ADV second X third quarters on overall Index this of and as quarters ADV. year

increased is important and time product total increased note It has QX, has ADV volatility, only frame by innovation. but same through XX% the compared XX% Year-to-date by ADV is year. of with growth also last options driven our not that to

size size. E-mini new the Due revenue despite smaller that the tool most lower X to We X.X view useful the customers the E-mini commitment. micro contracts, risk equivalent the per the our million in approximately premium of on Micro to day One of as upfront contract X/XX products of our attract Micros contracts innovations point the successful basis, at a equivalent and price financial notional to XXXX. equity was U.S.-based trade the given launch international continue million a being and

Sector block also OTC functionality. bring Return Interest to Futures, most Index Option as functionality Close, CME and Futures, Rate products recently, suite such traditional a We've Futures, Derived Dividend Equity Adjusted Block introduced Trade that of Total Basis

while quarter. These approximately franchise. of under equity rules These OTC equities the of products standard capital to need by XXX,XXX that Xx meet contracts fees and premium the products command margin efficiency from our alternative per in rate third the X added day afforded uncleared customers' benefiting

to FX of has investments. business currencies, turn low alive the disparate like price following markets FX those a to at the extended quarter to ADV OTC through historic banks foreign with during CME. to we built market. tools innovations in equities, trading exchange us volatility of the continue will We've currency have FX continue now the innovations from harvesting volatility I low Similar analytics show increments, out efficiencies Now changed the to and an approaches well the market Link, as emerging FX XX% cash minimum volatility alternatives in third FX, introduced interest of central added to that are we our and period certainly global the year-over-year. which and markets rate and EBS position benefit introduced flow These created up period, come

commodities, the now trends will international options address in our and Derek businesses.

Derek Sammann

Thanks, Tim.

positives for only by which Natural impacted market products down our was our dislocations crude and was U.S. been like temporary Hub structural benchmarks, our While in that business, has we Henry refined Energy cost the oil, energy long-term QX, WTI including asset Gas.

exporting is is term U.S. XX and refined and the of the and producer crude of WTI beyond and producing The refined of Asia, priced million current supplier world's the to increasing marginal benchmarks nearly U.S. a long the natural of markets. for gas, off day supply futures barrels crude largest record Europe and positions by a Similarly, of and dislocation. boosted oil which products. levels exports well Henry product U.S. natural Hub the price liquified gas oil exporter

coming which the global medium as for market are benchmark natural U.S. gas term, bolsters in for LNG to Henry online the decades facilities the in come. Additional Hub the further

war the through transitions and term. to management of long the we the Ukraine, the strongest energy risk positions this markets, market the over we class have grow environmental which tools the believe disruptions short-term global portfolio us caused by well asset that in As in products

coming this contracts, X% bank Latin options. global daily X.X CME's serve the saw products, strength lumber. year-over-year Buy with for side with and price growth up agricultural average livestock, strongest dairy in quarter customers discovery grains, performing America. particular from in customer of client the are is In our third and activity markets year, as and million segments strongest global increased our oilseeds, benchmarks We in volume

Metals. to Turning

daily XXX,XXX by aluminum continue Group's contracts, September. a in quarter both Third X% to CME XX% growth volume led increased average see strong commercial by to market financial and futures adoption participants.

inflection seeing, market. prices our in point the procurement be Aluminum from are contracts customer metals we top the an reference feel commercial physical had Marex, we growth customers, we important and are the we've that in COMEX by broker, of to growth included getting success adoption in Given for at this

to Turning options.

for and exposure futures. premium helping world to can our powerful today, and Interest in more levels continue Options options be We means about see the in cost-effective the the since to earlier ADV only a Open of for manage uncertainty Terry getting a outpacing environment global are tool is included. risk high spoke and that customers option

ADV options, are XXXX surpass on year a X we record XX% to year-to-date contracts With day, from X.X million to million up of contracts. track our

we our to versus business to our generate track deliver international of quarter, million record strong million from on last our to compared year. are we delivered continues contracts Based non-U.S. September XX% third year X.X record results, X.X million with Finally, X.X In ADV, the up ADV another last year. on ADV our through volumes. record year-to-date

turn John. I'll over to that, With it

John Pietrowicz

impacts up in S&P formation our quarter demonstrating compared of revenue fourth nearly of adjustment year. the This CME's approximately was Derek. in to in XX.X% for the formed driven adjusting of revenue was third for of a that that September quarter markets XX% joint the activity. Global with when up OSTTRA, our $X, the of consecutive of quarter growth, Thanks, these billion and we by the last venture is XX.X% growth importance third XXX,XXX,XXX when our times. year last uncertain trading This double-digit making post-trade

reflecting fees. a were very revenue information Data $XXX X% to carefully $XXX the markets on quarter, to ago the a million, to and Expenses and compared license for million produce. Market again managed, excluding up year continue be record the basis strong an during our need quarter, for adjusted million, $XXX was the

of the are the the foundational applications. cloud and to we as nearing Our expected, necessary work completion efforts our towards initial migrate to moving progressed

were of X%. guidance our OSTTRA, cash we incremental and of spent the towards that project. On end that Google year cost Year-to-date, formation fees for $XX expect to at and approximately year-to-date $XX million effort and million impacts in XX% approximately our our were spend, up basis, up license and a excluding expenses year the within revenues adjusted our the first only

and manage towards with cloud. to capital to effectively our expenditures continue our the We an move eye

we result, a $XXX As million. are our to guidance CapEx lowering

approximately million. For $XX were the quarter, our expenditures capital

pretax investments joint have of these Our adjusted basis, for Year-to-date, close contributed ventures XX% $XXX.X million our CME income meaningful to continue and Group. investments on this or results an to produce year.

our of in leader they and earnings for creates The to businesses post-trade capturing the combination scope Global. strategic with long-term their This growth. out. to importance addition the In contribute, synergies scale is joint OSTTRA that continues venture play has S&P through space the the and of the

Our first annual Dow XX% joint venture Jones S&P of Indices delivered has in year full average earnings growth XXXX. the inception since

Strategically, futures. creates our we secured destination of joint equity XX% equity the the that across us exclusive of rights traded futures to making capital at our Group overall the significant global contracts have ownership for efficiencies venture underpins CME and the through over complex, indices the

we've We position venture CME investments well move also financially. that the exchanges benefit joint strategically other These continue trading made of joint from continued licensed ventures and by and from the products from to the passive investing. to active and other to

EPS out attributable effective an to XX.X%, and dividends of from CME of up billion paid income quarter CME adjusted last the in net so end tax quarter, billion. year $X.X this $X.X shareholders XX% resulted of the an year was $X.XX. and common approximately cash far at of million, the rate of had which an adjusted $XXX third the adjusted For quarter

for to you. executive innovation, Based to address In results last up your for our shareholders. highlights like clients now call details. summary, strong questions. our execution, focus to additional financial the the deliver commentary refer global our Please for and and page Thank the and on investments open benchmarks, data, of of our continue We'd needs

Operator

first from The Rich question Repetto line Piper Instructions] from comes Sandler. the of [Operator

Richard Repetto

thing and Terry, is John Peschier. for guess I John first

years well. thoughtful been team and forward a and Jennifer a and We're to You've he's a has with training very work going Susan. pleasure unwaveringly been many and the working committed loyal employee done great however, as for, job excited and

So congrats, John.

John Peschier

Thanks, Rich.

Richard Repetto

I the last license was behind was within you or think, an so would media the understand obtain FCM Terry, that. of be, I one month question purpose the through CFTC. that the or apply my trying an to to FCM rationale try just I what for the reported, guess license doing

Terrence Duffy

Appreciate Rich. it. Thanks,

how at Your a for of we'll about would filed tremendous eventually speculation perspective. would would to the But FCM. never And the go was an right, use I there's CME not -- application CFTC then NFA, first day think is we I the what's been or think and we cadence how all just ever use an important amount I defined FCM.

to that to don't an X, anybody think find don't it's or I different? like. know going Is I going what best XX going And important know know. now. that's I know that it look does note don't like it's XX, same think to today also interest FCM and does it I anyone's I X, out. to from as I years will look look know, don't to the completely look wait to just what don't is I in

along that I I think sure CME very be want My you is as with should them we see. said, something them clear. FCM our And I've community, commitment, our to going make and to FCMs commitment going we But to process FCMs, with to them how to existing continue make is work and can unwavering. better, partner make future our our to better. are at

speculation also, products. think of And I know to about there's is So CME because their FCM important. get retail on looking I that's really own

about clear be me Let this. very

FCM base market has plenty Group. base, retail to CME wherewithal may of FCM or be, wherever address and not for the future existing our Our may that

an of not, that is So not purpose the doing FCM.

that we important things. clarify just of really these it's I So few think a

the so. to to will That enjoy, and not with also we're existing that don't model work of want position the road, we that -- could we change and is continue my is be we company's we will do mind potentially again, think the our is things FCMs, the But we down but position prepared.

associated X. when So our this say that, with is FCM costs about so I far

filed So we this. from in watching will it's we be We very, any CME just coming into not money carefully. not But position where a put the application. we again, put will ever have an behind. very space And

be forward. always will leading We going

the I it So hopefully, but I to and clear. make more, questions really answered want

know with FCM no can if, been of has that need is There's people the be Those things worked FCM purpose DSR status, they the have existing around. with about or that I application. defined nature. around talked to CME for that of the not applied today. pitfalls the model competing worked our But that's all all be in things fact,

Operator

comes of from Jefferies. question the Fannon next from The Dan line

Daniel Fannon

Congrats, John other, question Peschier, is My John, expenses. on on your the retirement. just for

the pretty into material obviously, Just guidance implies fourth the up quarter. step a

that talk terms So could and entails you what ramps? on where of how about you're what spending in that --

but just Google early, guys versus then the about you And thinking growth know in what talk investment of done and how about and have expenses spend XXXX about think the to I roll it's you historically? of other forward Can kind priorities.

John Pietrowicz

this quarter sales year. improved activity of the customer is fourth increased in-person Dan. of of Yes, this terms year a and years, to for events Thanks, expenses, heaviest we Thanks quarter generally that fourth occur business marketing reflecting quarter, environment. the in the There of quarter we the number expect and quarter planned spend and question. expected year, are in fourth traditionally Yes. all the the -- of in speaking, fourth this

business XX% So about and heavier bit look last OSTTRA, year, it's QX QX a have a expense from year. and year, imply we between if at a adjust little last This improving year and the we QX. not this that QX. And at QX to you if XX% look spend for in you expenses increase saw environment between would see the did This about increase. you QX

in-person So increased sales spend we are expecting marketing travel. and definitely more activity,

seeing at you QX, So a remainder that when expect -- a accounts of for when QX this look XX% to we at some the -- you take that The look sorry, of the sequential we're the our increase reflecting key so approximately company's take resources. and to staffing The variable be events. compensation remainder would the to and of wages, in to be increase related performance increase roles of marketing, related customer-facing travel in-person and salary year. and

going the than the We're this higher and variable to expecting is last number last So the quarter. again, year year employees also into this compensation higher year. than hire of fourth year, are last year more

professional We are we increased services growth investing to also see as in projects. expect

year of the QX and kind that accounts and bit difference about a So growth for year. last QX to compared this between

early give team we budget here and has the knows as as entire over done bit right, are job the this You at and tend know, our year, guidance. a of managing you group we very in too looking costs, the as year. entire do process same for the our at It's next to towards of CME years early effective and the incoming a to are

And we process, the as said, are in that Board. building by to has and still I budget the be approved

with to we So locations, efficiencies, judicious definitely process looking hiring. impacts, we're those in our are inflationary and eyes partnering being leveraging impacts and cost lower on keeping mitigate vendors through

going think the to We've we're how And costs to that we'll into a about think to spending about very last continue ensuring the efficiently. leverage effective approach done years. I is next very been So job that several year. XXXX we've think over managing way

of the kind core the of some that's So business.

spend through plan In next for We're of year terms Google our in and terms migration. working of the now. the

$XX We a we incremental point million earnings last, guess, are, next will similar lower, of where the I on as X we're volume in years approach couple approximately to I levels. mentioned, as be the spend average costs calls be expecting assuming over ago, the

how of planning to on on be think we're of that applications I And but migrating be a year, this the a the Google kind will type to fast platform. going spend similar we're function as

create the rolling nearing to completion. terms It's we start those our as apps pretty at is would we And be. we're about progress. -- expected of order Google prepared it foundation where remarks, we're initial my where to So with I needed said in we're in that pleased in

apps looking a to quicker XXXX. rate migrate at the we'll into So going see be

view of kind the so this far So the year. that's expense this

Operator

The Alex UBS. from line next question comes of Kramm from the

Alex Kramm

to the transition. Eurodollar about talk SOFR want I LIBOR, or SOFR

guess, Now also to understand a revenue in correctly, that impact. a really both what potential this have, to If I Eurodollar. shut that I down April basically from I means, date and want the you next volume understand

you're remind it So independently when Eurodollar non-charging? can SOFR for us or comes to where charging certain what you and discounts today still there's

And then arbing assume importantly, guess, of, away, there's between trading a happening. contract more one as I goes X today, products I those or lot

So just wondering if from could clear about, you volume we're have an estimate, how how like much revenue that away? of much coming impact So year? again, could go a be today? that And or next potentially

Sean Tully

Thanks, Terry, Alex, question. and thanks, for the

very traded now what trade XXX,XXX more every Eurodollar in Futures million trading than than pleased now of transition. day. double per Eurodollar SOFR options have day a while are volumes futures in are Options contracts XXX% the Options SOFR the traded SOFR the progress September, more we contracts and SOFR day. trading are We SOFR made X.X Futures with of

interest, contracts Futures, for options. more million XX.X% in futures. reached have of XX% million interest open or SOFR of than open So contracts Options now And Eurodollar XX X or have Eurodollar

RPC. In terms of

you Options support strong well from initiative, As and our which our we as in July for First U.K. June, August, had as Silver very executed customers. U.S. regulators from know, and

that August. program enhanced same to participants secondly, create and build That all, growth to July and liquidity, in ecosystem achieved that for marketplace waivers significantly for first SOFR incredibly in much completed of incentives back and in Eurodollar August; Futures order had, all end of as That First marketplace efficiency of the as have terms in liquidity and and the seen. June, has Options. the enjoyed to strong at that, we've program, for On you've Options the of fee the was

We have achieved to very much what there. we needed now of

as decrease did that, those to with and at And the participants. I remove of overall the did said, August, market we incentives waivers end we fee

incentives. that to to had continue have liquidity and As incentives Eurodollar you Futures our and have know, are incentives we ensure for participants all important historically have

and are incentives for the longer SOFR we be required So and expect that required futures do Eurodollar run Future in will that for options the Options.

that however, to incentives, We Options we above Eurodollar incentives do expect, we've what the Futures able extra to in and the the for continue months. decrease coming be had will

So think overall, very good place. good and we in are good we're we're our think We very I place. in on we're think we a following plan. path, a And a

Terrence Duffy

Alex, let just Duffy. -- Terry me it's

that said on Let didn't because between question of SOFR. arb one your is what parts the Eurodollars me we answer Sean of add the to and

up see discontinued. to going knowing the the But the end that objective did You and was have contracts have said two. have to in that be a we both goal lot did. to at and X years, back remember Sean SOFR and going to what of an or and that going forth trading I the between ago said, years are quarter benefit extreme is and every and well at X.X was products, subsequently LIBOR listed forward, full CME, others the we these

you you Eurodollar. than arb, the success from have the when think you the I it to So SOFR, in Eurodollars at into rate which larger are gave of a which will now look statistics, the arbing at look Sean

So Sean?

Sean Tully

part that question. the of Terry. apologize, I answering you, not Thank Yes,

the spreads perfectly XXX,XXX it quantitative. intercommodity the are X XXX,XXX between and day to running So products make between a contracts

Terrence Duffy

Yes.

insight. hopefully, So gives did successfully to bit along you it that. Eurodollars strategy of into as that a we little is All that and the the SOFR, incumbent more our move the was

Alex Kramm

great. Yes. No, Great that's numbers there.

Operator

question, Morgan from For Michael our we next on Stanley Cyprys line. the have

Michael Cyprys

you evolve on you latest in And and customers was basis back to expectations get point wanted around XX noncash on hoping of how I expect us rates given update rates. can as forth balances cash movement and hike the your if terms between another expect just and ask collateral in interest those cash noncash about customer Just you in rates the to collateral? take collateral, here, And well as from to from particularly take see collateral? we what shifting November?

Terrence Duffy

Michael. John go I'll let answer that, Thanks, ahead as might in and jump well. and I

John Pietrowicz

Michael. Thanks, in earnings look our at its totality. Yes, let's a Yes. take collateral

clients offset by billion income increase more the got nonoperating balances. So and X on cash was X section quarter, which at of were basis an Average higher were of billion sequentially. the house, which by first, our $XX.X were $XX in points helped returns, to for in to balances that earnings $XXX.X clients, statement, lessen that up reduction was lower than held we've rate those cash the passed XX on million clearing our by basis hikes The the points. last and

our our in was income primarily clearing to basis a statement. of in X increase driven increase revenue points. X basis Custody fee the house clients average revenue looking million, $X other balances -- in an So those on points section held noncash X by from by balances our up and collateral

Balances eligibly average fee in billion of charged from $XX increased billion QX a QX. $XX to to in an

in cash, $XX had sequential our of nonoperating earnings the we in line, income $XX increase sequential revenue noncash a $X million which section an million is in sequentially of statement and in collateral a on for of total on So a million, collateral. increase of that's the increase earnings

what so far. on the a take quarter look let's fourth at is going So in

billion on an the of through $XXX.X and $XXX balances average average QX, for XX. So roughly with ending October October balance billion, were so XX, cash flat cash we of had

fees, of billion. the again, there's don't billion, which collateral, average fees, earn through October $XX.X an $XX.X to the subject collateral, noncash collateral, we which is with on, another so ending fees Noncash to subject but was for far XXth balance noncash

those how quarter for quarter for So what that far. of balances and the are you trending fourth the idea so an gives happened

that. there's So number happens what that factors into a of forward, of going terms in play

types is the that at is risk trading of put subject the the of to be total trading. required for amount First up house, and that management the clearing which needs collateral to

size the of up noncash and and their business. they determines certain amount have amount that to collateral run put then of cash a the clients just of that's need will total that collateral So

So they'll depending put they on that have what up hand. on

return. that And optimize up the their can to that highest will portfolio, the put extent they they yields instrument

So cash return they at that we the put -- of they amount can at the cash amount could clearinghouse at the up instruments look that other they versus put the clearing on of get they house. up

what that that balances their is really last a has over far. they basis require proven businesses minus But to moved. we've and And maintained going to point the portfolio. spread a so what been able maintain be to that's Now the Fed hikes optimize I of maintain versus effective done be the what to we've think function their how rate we've XX several it's

Operator

the Our Deutsche Bedell next from line comes question from of Brian Bank.

Brian Bedell

the other Great. sneak aside in Maybe in, there that collateral costs the the other balances question. and just expect in coming nonoperating of in investment I collateral from away of the can sort Were into question, to transition I next go income? of drivers is noise you months? on other all, one the fourth the first balances. quarter. one LIBOR the the SOFR is income RPC guess, do And And is on trends RPC from other over one that if nonoperating coming on or fourth that on quarter sort line of rates some that the clarification

on into power that like franchise. it coming you just across XXXX. looks micro Maybe that develop how you some as the think outlook -- well pricing of And products have that as may sort then on

John Pietrowicz

lot questions Wild a in of there. grind, there's

So let's moving you think income can -- will that look that that -- are for understand nonoperating for the and statement. start section our be out I the helpful take to And parts at all entire a there. of

between $XX you clients held cash I little our on increase of section QX bit in take at and that earnings up see statement, a the look you nonoperating was and income of $XX house, million. clearing if a by about sequential our QX, a million. talked it's the So that the

CME up about earnings saw also million. and cash, was $X.X that We on

finally highlighted I prepared is in of investments again, slight the with here, performing. credit up pleased the $X.X that our was in to ventures a interest very earnings about was that That And remarks. the last million, in expense. in did related was increase increase earnings. And and a subsidiaries. that it way see then I an think joint unconsolidated kind So We been have and received we quarter. We're

This impacts onetime the venture. see quarter, of however, joint did items we some in

post-trade our Global S&P OSTTRA, venture was about million. So is joint down with which $X

down And because And in and the were Jones adjustments. there S&P Dow about QX both in $X QX, onetime million. sequentially that's was

the million those range. flat $XX.X were million the with in those normalize on earnings on joint out, to you joint If relatively the ventures venture OSTTRA $XX earnings

its roughly S&P And $XX Dow are joint the you Jones million to then results look in at venture, range. million if $XX the

joint the point XXXX. it's you onetime look adjustments kind when XX% when another at CAGR that equity in subsidiaries to make key a for of since the is you there had the look of year-over-year, items, at So venture line, -- unconsolidated joint make when and you XX% venture nonoperating about up is year-to-date, -- the Dow S&P and the Jones the

how performing. So very those pleased are with

that that breakdown of So the your on of you gives question. kind part

want had you that just question that? about question. You which of Do the Sean, kind think, hit the a to reemphasize of kind you last I RPC,

Sean Tully

Yes.

terms I said, June, and we In August. fee in RPC, waivers the as market-wide of had July

were August. at of those the removed of end All

liquidity In and addition had that, August significant gone. all June, are incentives we July of and to in those very

that Futures that incentives had in historically still are and greater place. for some incentives Eurodollar Options have do we've We than the

will reduce I However, incentives had gone, additional waivers SOFR the a have significant additional right, higher fee in are we during the significantly look as and for for are obvious been. RPC Again, we QX. liquidity expect, that the and do June, we gone. -- to August July Options those reasons

positive be will those So QX. in impacts

John Pietrowicz

on And for on then -- power a a you was the had there micros? think, question Brian, question I pricing

Brian Bedell

across increasing categories. For all been the they've the yes, micros,

sustainable. So just wondering if that's

Terrence Duffy

about about, John? Why something don't asset talking equities, the down class you that want the to you're you talk break

Tim McCourt

sure. Yes,

to to my as So this the premium thanks, sibling X/X size. X/X E-mini X/XX price E-mini is look Micro the between But They're at I Tim. of are remarks, they Brian. opening contracts, a index we cost. they're about on depending said the you're in And contract. looking -- at When older the

So that for is is growth in volume terms importance. a good driver of of and us. of both that something revenue been It's

of in other that's on to I is respect at the value that might where not than, important commenting it's choices ETF. the growing to its note product look go faster when with we E-mini pricing Micro think Despite to power thing still the a SPY market. say, at one being the premium, in future relative that is

spot contract the S&P in comparable to CME the products. that's ETF, When to XXXX, E-mini is tremendous and value at you growth up evidenced of over as When premium the growth to micro by the up as XX% the as year. the contract the and little a marketplace price the last still you sustained versus XX% premium about E-mini look look that's premium ETF, the versus well command it only despite at of at

John Pietrowicz

building through time Yes. a I question the including of from And take terms Fannon other There's that look other and that mentioned, budget that now, can a pricing had, innovation at number we're market, pricing we've how just going -- in our the how in the created. get is of process as in general, right the into that we the this Dan much pricing. the go that health factors created, clients decisions, the of we've liquidity exposure markets, our

our the review our we lot a about tremendous mentioned, Sean developing clients. for plans is as we every a incentive But think, do year I of We process of job that value has do time. that this and regularly. done, in We've normally that

that the in clients. ensure our resources programs reallocate developing of to we're for we'll and So value terms creating liquidity

process develop for as So plan the that underway is XXXX. we now

Operator

Kyle The comes KBW. next question from the of Voigt from line

Kyle Voigt

driving growth that drill bit you you being that and us provide segments in Asia. Maybe each It of color is It just FX. on or looks further over the like was us X the growth? Index quarters. growth any Equity strong lot customer and of the It growth more quarter a question like the understand which help the at has in a looks driven past help -- a by could XX%. there in Maybe think accelerated extremely are

Or it there levels? there to way from to much at ultimate or that And managers, is grow the frame runway kind other of is help hedge more of how opportunity retail investors a funds, asset users? Asia? is these size And

Terrence Duffy

Derek?

Derek Sammann

appreciate Yes. continues question, to Yes, strength. I go the to from International strength Kyle.

year. track As We're $X.X pretty to you million million our last to continues Asia a at I the of averaging non-U.S. strength. year from go And for call, volume last mentioned year's $X.X is point we're beat strength record, rightly which growth in significant top on this on out, as a total year. the

the consecutive and QX our XXth we quarter put up consecutive of In sixth quarter year, this growth. of

LatAm XX% this about business, our XX%. grew our we're at APAC business. up and year, part the EMEA XX% grew fastest-growing On of up

Actually, strength out, growth particular When is region, Asia, of seen we've business. area you our dig into for rightly with the and the growth products, our equities, point energy income. financial interestingly, fixed you as strongest

Our Asian well. Energy as business up year XX% this year-to-date

So growth. it's broad

country particular in for is across driver at look strong you us. growth, it the Korea. a that's we've where multiple individual delivering is strongest one countries. countries, Equities is spread seen It's stronger bright When sparks no particular

couple Our business have XX%. of pretty jurisdictions over has us the of for revenue generator last all been our Korean our this across non-U.S. climb That largest stepped year second up significant is into that years. now a

primarily Other volume volumes Middle almost specifically, India, XX% is Arab the growth. and significant growth up Dubai, XX% East, out up this growth drivers is and year; is Asia XX%; United Taiwan, coming showing of Emirates of

team strong sales Winkler for channel global a continues a clients Julie Asia and and are strong area of global regional bring for of campaigns that's I products support the us. to sales it the So partners. big well. our and the be her growth that part a in pursuing working story. Retail story there And energy as our is part through Micro said new

of forward. client's penetration and you innings that going hopefully early that in color we're probably what we're some think the seeing, as we Asia So gave on well

Terrence Duffy

participant most has around -- actually and globetrotting and know the business as other last managing over ] a months. customer-facing international Kyle has [ has the Derek as several been now analyst he I members. a He division taken team the over well. and being restructured the

whatever So to international businesses of the to of success I the with putting a think and lot the the face like you say. that's the a name face, name added

all international, of over costs clients some think That's good in a job us to front been numbers, our are heading really the back for been back there. this. okay. the really it. but up and stressing world, get of the We've Derek's out of reflecting numbers and new we John I that to done important And are in reflected

for you your thank So question.

Operator

Alex of from Our from Sachs. the Goldman Blostein next question comes line

Alexander Blostein

we have light markets. I fixed zone in guess, dynamics market place of little especially relatively cash, of former some of the income business in -- there, seen broadly also Great. I what volumes was slower. seen next in could we've CME's in revenue, kind hoping slow been on of the We've on in the sort volatility a the are bit trending

happen you muted going in is doing what doing And just is, through well, worse? look a needs long is color this as as who clients, the any the or more? terms you think to as Is get as do market little ultimately who to could better, activity? of high So there's provide to bit QT it catalyst

Terrence Duffy

Sean, do ahead go want and that? address you to

Sean Tully

very Thanks for Sure. much Alex. the question,

very If similar to you they're our up Treasury volumes, Treasury is year-to-date. It look at U.S. our Futures BrokerTec year-over-year complex. XX%

most instruments the on are Futures, Treasury CME's growing at planet and the available Treasuries U.S. levels. Treasury BrokerTec So similar liquid

XX% If repo and you detail, was year-over-year repo up business is look more XX% year-over-year. European U.S. bit BrokerTec up the in at a

European business are on record repo our track U.S. and all-time years. business for our repo So

Some migration some initiatives in, to engaged have good BrokerTec relative of also that we of post been to Globex, the have the seen success.

Winkler. $X.X cross-selling our all-time the new never working quarter new day achieved currently clients with Our BrokerTec futures under that a on type RV record CD&S clients BrokerTec a of with before, $X.X trading day. and team a Julie our our the order in billion platform it are and We've have X they trading to billion third into added traded

in greater But we marketplaces. saw significant share survey, alternative year-over-year, in to at market ] see you the [ If increase September, you results a there. can the relative look our likewise,

and in very market, volatile. level obviously, terms remarks, said go In years Treasury the in at is opening as forward for we of highest X the our is inflation,

sheet. to by You've billion. also Reserve balance reduced Reserve about Federal sheet see date reduces only its balance $XXX only just the begun has its Federal The to

$X reduction expectations trillion year we've seen $XX for relative in balance billion in far. more than reduction Fed balance That so you next sheet that month. If mean year at $XXX for at billion the look a next sheet their would to in that

streaming of terms direct our BrokerTec getting the built We're technology leveraging in analytics. further a that also we good well migration, doing the also investing in platform, traction. new post in So for initiatives, investing EBS. business We're

a So new a for technology time reusing that business. second

to of So that balance of be government, decreased overall, I for deficits U.S. Fed years that business the should think sheet come. and the tailwind the the increased size of the high a level for inflation

Operator

The next question Suisse. comes Sawant from the line Credit of Gautam from

Gautam Sawant

interest the had just rates just One was the around here. on I complex. commentary X follow-ups

rates, the Given from changes and curve the seeing right in short-term end rising trading of maybe the with types migrating activity trading into now can of of short types longer-term the risk speak and strategies products? the to management or you strategies the behavior could to medium- you're client that translate

Sean Tully

sheet have Fed expected will the as as said play. the although growth the seen growth far deficits, for trillion of expect, reduction short forward. strong with as the office end pace. the seen in and a our Yes, tailwind stronger we have participants the We long that, very sure. the slower balance can at in long the congressional $X I already, far and single Options. do budget end, we as as end, SOFR size At with Futures in eye see we that We've double-digit from market move in also growth, every meeting a Fed We've seen mentioned

Gautam Sawant

can And the participate operators? willingness physical just some from maybe of if a as Okay. update the warehouse international provide to on And there's increased metal an you follow-up, an complex?

Terrence Duffy

Derek?

Derek Sammann

We've aluminum. the happening talking have seen X We've into post years. in Yes. a market of in success change market a This great alternative deal established this been as Good industrial efforts been year. question. over of significant providing in March what's about, robust metals copper like significant putting we've last the in markets markets We is Derek. pretty certainly the -- a

and March. interest CME side. COMEX metal the advantage the in and an our looking within markets seen to have significant We aluminum client in specifically increase what how side precious of on take seen influx they business of activity new We've copper just Group know, operate a since customers demand on from

and LME, top into providing markets. As market aluminum providing an to my was Marex, they on which the at will exciting yesterday customer out COMEX COMEX expand market commentary on announced and the were access has largest access I development London aluminum mentioned be of their a of into call, is basis daily direct and the market there broker announcement products reach

procurement, for also in a COMEX physical more aluminum moving we're references We're that's their lift. when seen right which customers physical heavy benchmarks, for commercial

see well on on increasing interest financial demand. the side we're commercial the adoption participant as client as as open both So of based commercial side, excited participation participant and on the record to as well of COMEX levels intermediary broker volume,

So needs. positioned we point that market, are global client into we're job inflection We're I but access and that We're a to here done and going our serve seeing to like things of efforts think, we've market, in this are few here. something over has procure been where we months. a last good where the from

Operator

of line question next the from Owen The from Oppenheimer. comes Lau

Kwun Sum Lau

First of congrats I retirement. for the John all,

would for also your return, how buybacks of sheet leverage, the in given given think cash compared capital on share and trading historical you the of variable balance valuation, to dividend have where as well? of is year? share terms think capital amount terms Also you in at level, your about do return, about this you how So

Terrence Duffy

here. and determination. process a obviously, On our our walked variable, We market, our see look obviously, on we to let And factors Finance variable, comment bit through in and we coming. I'm at, Board But the with our make Committee. Lynne meet a and going we John a little certain what

-- out will -- next. beginning be don't that end getting So in year, beginning next sometime we information of we of the coming

John Pietrowicz

Generally early December.

Terrence Duffy

Early December.

Okay.

time that so we're to one So at a we to not yet, we're little where on yet. that going on got commit

still process. that . finalizing We are

Julie Winkler

been dividends like structure I I has us just of over that do would We've But served so returned well. since something guess We with our in have we'll is Committee Board, Yes. of that transparency billion this review policy continue said, we add place and shareholders the Terry to time. forward. XXXX. we the the Finance that we to since $XX.X has going it and approach, do as the regularly think through

Operator

next The Citi. line the from comes question Allen from Chris of

Christopher Allen

lot a put you Hope future. in the golf of Peschier. Mr. Congrats,

John Peschier

Chris. with I you, get Thank to play you.

Christopher Allen

swaptions no ask questions revisiting and be Hopefully, on U.S. basically when in this time. And of exacerbated complex Treasury seem the high I in for back there's issues cautious I some liquidity consistent we're to wanted markets, treasuries any about by fires also headlines asked. mean and to to talk volatility seeing levels. just the a caddies market example, already rates you forward. to the moving letting the getting outlook players

reconcile see I'm seeing rates in rates. you're just now. to right open good interest in very -- trying with trajectory large record So We that a holders

the particularly on like impacting understand complex future issues us impacting volatility help side Treasury you're maybe thinking So other markets, or not in it's OTC and that's how and how issues cash potential and liquidity the about moving the markets you forward?

Sean Tully

Thanks for question, Chris. the really Yes. one. A good

week the U.S. If you yields XXXX. the had over look a increase since we XX-year the in previous of as note notes at ago, weeks fastest XX XX-year

seen are the have and speed volatility than which of in level years. we the So rates trading not with more XX

the have size. much they to market trading, makes Given -- the are that, whenever terms you volatility, reduce for greater it participants of right, in what sense

So at a any give to our the there management amount of willing of that price tendency customers, risk prudent individual is to lower for are they in terms level. liquidity

price trading markets when quickly. even high in the this seeing every typically are is We through very level volatility that move our markets,

think the well. I overall, operating So markets very are

the keep as tends is works. And move of to just a that that I prudent in much would mind something say much be natural market by top smaller, customers. And more reaction management book to to our again, is quickly, and it's prices how risk

Terrence Duffy

maybe balance think most liquidity be liquidity Sean's I seen. and their has to also to at raising telecast priced at also priced, about the ever talking bit that their sheet the X.XX% a Yes. point, but them have what they that potential I had same we've would into disruptive, you say the to this a exact activity. clip, little people expected down Fed When drop be time, bringing

to I So XXXX to step when is and they different think when this add saw some in liquidity. than we had in

I in. has been liquidity with So fairly priced the about it have situation well-telecasted think happening participants this what's and

we there. So the know be benefit to volatility We we that, think going from is it. and

Christopher Allen

think temporary guys catalysts this down about of Do volatility going as settled you that be kind a you situation positive forward? that

Terrence Duffy

could at when for $XX I years come, of referenced won't on speak debt to rising. out that but the trillion go you're some Sean, numbers for and the he

whole issues think not with the host fundamentally a only with one other have deal. You U.S. don't of and I but associated done a this globally. is

could So be this for a around while.

Operator

The next the from comes Ken question from Worthington of line JPMorgan.

Kenneth Worthington

is Or OI the better million do into else? interest we it outlook? about what has open open growth If in a from after And current something that see million of million, is $XX Options interest your Maybe outlook of from be and might at here? months ultimately stable the XX volatility next about it about XXX been from OI. so? interest think What dig OI is you best or percentage the to Or million $XX contracts open classes levels? what for Futures jumping might XXX February over asset lower drives outlook

Terrence Duffy

we don't go could on up going open could and a her tool Julie reflection know. an a Ken, interest factors, interest that the of be. It's just internally Winkler I what the like to interest There's so a that's that make down no going us by open here look room issues in predict volumes. Who it watch anybody guidance Julie keep give factors, function like? have crystal internal many cannot what whole down, to could is to The up. look believe is trade not. host could knows interest open go have like. a just close do pandemic think is to we the trade with that team that the her that on. or not helps we determination open We and the team ultimate with open geopolitical or what We of going future very going -- ball think could

do asset fundamentally very, And should look it's be at think time. which day. would you at interest else something to times, things the difficult energy classes, That's, that different opposite again, it's should should else make When But lower, a open and has each reflection on obviously, on massive higher the the classes. especially and maybe guess, you different be that particular something that of higher should And ag be maybe the the prediction. very why or be lower. some we I People for asset the than publish in every it.

transparency the it. of see will people So Derek?

Derek Sammann

Yes.

to strongly more than you the us has across Options side. hear very of on across class asset board. I volume our every the there's versus options, perform continue it's options to Commodities to story single futures. on a side, actually up the continue look you the think story at struggled now at financial strong year probably been there When tell. the Ken, look future you bit a when a relative a it's side,

franchise even and When interest options there, you open futures in year-to-date volumes stronger down, XX%. in are asset actually futures story, are up Our commodities where even interest across a entire the dig volumes is and it's up XX%, open you are into classes, in down see options. the open interest

Futures options interest when example, X%. interest energy For we're up open open down seeing is XX%, Energy

regardless almost you interest an the this of gains. asset year, every see So trajectory open single class, volume

futures seeing look every I of options electronic tools, it's reflective asset we're as why class, a think the most using portfolio more that's important and at in of broadly deepest markets people provide in growth bigger and options. their management that we part that's and more

Terrence Duffy

price open forth an be is has But whole effect just futures no options on and why the interest. futures back all that in That there's business open of more and go interest reasons, to future. one the because if the higher and growth more be for lie there'll the interest host options, a than can and careful, don't particular open options options futures growth reason and or

not because growth of options open it So to that hold interest be and and goes to careful please back number forth.

Operator

of America. the next comes from of from The question line Siegenthaler Bank Craig

Unknown Analyst

definitely hedging? mortgage discuss This maybe system that the is Eli for CME TBA in the those? of with large the could then maybe discuss opportunity futures? product new from on deficiencies address Craig's you team. Could but elaborate existing a you It's front the And addressable this market, how could potentially

Terrence Duffy

and Eli. that Yes, Sean I'll Thanks, let market. address go ahead

Sean Tully

Yes. demand we new We're we that innovate client and products launch see know, -- continuously you as continuously for.

we of distribution terms value them offer are our November on unique to In futures, client And set. X. TBA the our launching here proposition is we a that

the market want have not to the market. many access able of to today, clients they to Group's do So CME and trade TBA TBA be

access So marketplace to have to have our has a distribution it today. use audience, this liquid to will much access us the channel wider than to allow

In that, add platform, this addition as our or product offer to any margin rates we opportunity. with that will offset margin to portfolio new unique a

to futures Futures. the TBA to trade you'll our at So spread a able Treasury be

TBAs cash trade. is look very common you the versus cash in a Treasuries If market,

number one. So Treasury the CME's futures versus TBA ability trade liquid Futures, the very to

treasury can And the a don't so get margining -- going ability I are then all trade propositions. those TBAs to futures the the and not unique wider spreads I'm value last secondly, know. between to predict. the they that portfolio ability audience,

difficult launches new predict. very to product think I are

impact. So I not predict will the

that, up. things long it couple a as to would addition other though, brought In as you mention I of

ESTR October are futures. We also XX launching on

the future So ESTR of rate. European the no ESTR European the successful SOFR. It short-term is on equivalent is market. There is significantly

If it foreign swap as being exchange at SOFR a is market you quoted the and ESTR. look between cross-currency spread today,

very futures. are of ESTR demand we're we a lot for excited, So and seeing

our U.S. well their then features to futures can business. SOFR and rate our are We're very in participants how spread risk, as use short-term interest Europe about to manage excited both the order ESTR that cross-currency as in their

I to business. addition very as said In repo out we're earlier, that, demand, strong seeing of our

demand year heavily participants. in all-time for European also an record are rates ESTR -- We're used European European seeing from in repo We're repo. seeing repo. So our our

is thing Last of mention will margining. in portfolio I terms

rate swaps first for portfolio December interest September, options we offered day in said as in of excited in December. of that a average. options as the of terms We're between $X.X continuously also and Treasury you launching market very enhancing participants can the be offering, year, and will SOFR -- that of a just swaps this month as we're rate and we We billion new I interest margining all-time on record And efficiencies in see, time.

that So I the helps question. answer hope to

Terrence Duffy

your question? another we for Julie, question. thank Eli, John, have Thanks, do you.

Operator

of next Simon Clinch The question the from comes line Atlantic from Equities.

Simon Clinch

John, I'll jealous. young retiring. as too say you, Way great to And so congrats I'm for just cheers well

And market market, actually BrokerTec that? cash prospects positioned implications question wondering about the what the transition I've And for you? of my all-to-all CME's on market. reading is the Treasury is I been kind sort just speaking the of generally any moving treasuries just how trading. for are was to the So of like

Terrence Duffy

your day. it's Sean,

Sean Tully

for for And firms Clearly, platforms market, including most trading requirements terms much very the recently, proposals new requirements significant to [ to or the in and reg you several become Thank U.S. ] ETS-compliant. proprietary Treasuries. Treasury hedge question. has for certain treasury Mr. Gensler funds of set the broker-dealers, U.S. in to out full clear become increases

now about clear almost talking requirements similar to the very ago. U.S. being swaps a as to are this Many decade

think, to not we and navigated and successfully our offered that it we clearing as at anyone I and build else, business, CME could be I margin swaps build in it order portfolio futures. unique -- OTC used between to that Group, with So by use earlier, swap we very efficiencies in mentioned when the

similarly. And so we will navigate this

over all are it. We

customers. with close We in are contact our

our We everything are and the order watching proposed ensure provide services our clients in to in the that that of will closely need environment. that we products regulations. type adjust we And developments in

Operator

comes question of the next Andrew Rosenblatt from from line Securities. The Bond

Andrew Bond

question, you on could see open gas want just currently. interest natural some the up follow to wanted market energy. driving the if dynamics the Just particularly discuss in of I to

benchmark Europe global more the back of past the to as commodity. years, has remained originally of but emergence low. of kind seen natural from interest U.S. shift a open the CME globally priced TTF and Russia, And a in we've of as the move to dislocation the few in Over we've some seen gas relatively

dynamics Henry relative of become gas kind driving are benchmark? it's the this you dislocated there Do Or the market? are discuss to you Hub think can international market? other somewhat that So

Derek Sammann

I Great appreciate that. Yes. question.

now about exporter than used Hub play U.S. and in the trends talk us benchmarks you before, WTI more rather Russia. at and the to into now right the look global be physical specifically. heard pipeline markets When that You've markets, the now, prominence that producer and gas energy is in global of energy largest becoming what coming important the shipment is from natural gas than Europe, ever LNG Henry

gas what Europe. than Right situation. is different in both natural Northern actually that now, about a Certainly, threat to is has redefined to European market that pressure based X and off. is specifically weeks pipeline TTF is trying because been in European the simply which just what we cut into is to There's input be address a be. out under something import specifically figure ago, the contract a contract, that going launched gap opportunity market to have gas an new LNG into contract in go to TTF

So source Russia, going the is is price contract assessment agent to a of that as adopt opportunity as think a to TTF no LNG, as launch that we coming from for for rely with gas that probably best worked Europe. gas longer market the in pipeline futures Platts import European we be is on can to LNG

step a back look Taking at the and picture. long-term

it's LNG transition, is the U.S. from coming lowest-priced not mentioned a energy XX levels. Asia gas of future as LNG fuel of for at for over the the is also the cargoes out call, and U.S. price the becoming Hub marker the itself, out a if the years. the And fuel, the gas Natural for export -- you of transition I Increasingly, U.S. the or world coming in the fuel the Henry Given source coming look is record is the that but the of Europe. liquefaction pipeline next of just top facilities

off is are and So central priced that price for and at strengthens a Henry Asia. gas Henry Hub Hub physical cargo center think, we natural the Europe marker is positions globally of market, the further the shipments as Hub, both marker where Henry pivotal LNG

market U.S. leader export our for the the like position. think the we that strength the the of being prospects like for of these of long-term with and Henry there. long-term particularly structural the And are very we well-placed So growth We markets. physical benchmarks Hub

Operator

line. question, as from for have last the Repetto And we on Sandler our Rich Piper

Richard Repetto

very it Chris floor have John do out question to said. a Since to and early, Well, the service, up time that's I was XX a that. I you and years. game over already do anyway, it, at Peschier's want golf suspect was on leave brought though. point like But it have serious work more his

working on number been of a been mentioned think you've And on I there's So Terry, I about efficiencies. know, change times cross-margining and margining DTCC. and there's going been leadership it, a it's at --

in clients? potential is just that to So the the I margining and releases something a and that efficiencies on come capital guess, benefit cross what immediately Treasury could it is And get board increased is with complex to DTCC?

Terrence Duffy

the the let obviously, for of then breathing that DTCC make timing, comments in this with has me working Sunil I'll when several clearing Rich, in living Yes. who, life the let and and on regulators. and years couple a been his former about entity,

final the government on approval a the with the month, at point -- the We margining. are believe, I submit cross into to for along doing now filings where to early sometime next we'll be agencies SEC

or when thereafter we sometime will clock the hopefully, then is that, up And in get it. between

try I these think process we in long -- it's to -- been achieve to a efficiencies. achieving

-- I've to head talked been time We now. weeks X it, talked to in But on So the we do hopefully, under the we're the I approval a this. to in -- of them. new ninth on I want getting had head good going again, line And overpromise that and here that. others. the that of deliver But I've confident President feel the we're inning of is SEC. to Chicago, don't ago. right at to I've DTCC get meeting.

strong ask for Sunil a this the let offsets it me in get we're relates the think to to I But position as done. very clients. give comments to

Sunil Cutinho

moment a We've margin with brief done DTCC Rich, effort today going well. spend several that and benefits. now through paring We do as cross we're on the houses. to portfolio margining I'll is right offsets. -- improve with The the

of offset, portfolio. actual function one's a it's of terms In

offsets it of basis then But So are of it and to then a duration-matched the a profile. different is is be a high. if if that nature, very offsets risk function right, it's the tend

So to offset a an portfolio and come actually hard dependent. give very number, very exact it's and it's

idea the Having futures trade capital-efficient their to who portfolios said products, they time. through solutions that, so clients give the can here is most and both carry cash

I our way we and objective, to that's that. our So are on think deliver actually

Operator

management are for hand to I'll there closing no the As further back questions, remarks. floor

Terrence Duffy

John to taking time talking Well, Peschier thank in again. again, us, well, forward all thanks, we well. appreciate But look you soon. you for participating you Be to call. today's listen We to to and

Operator

Thank you joining today's for call.

disconnect. now may You

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