Wednesday June 18 2025
News Source: Global Exchanges
Focus: Derivative Market Segment
Type: General
Country: Canada
On 17th June 2025, the Montreal Exchange (MX) to introduce the FTSE Canada Bank Credit Index Futures (CBC), a first-of-its kind credit derivatives product designed to meet the evolving needs of market participants, slated for a Q1 2026 launch.
Based on the FTSE Canada Bank Credit Spread Index, the contract isolates the credit spread component of a portfolio of Canadian Bank bonds. This provides transparent, flexible and direct exposure to Canadian bank sector credit risk, which gives participants another tool to manage credit exposure. This newly created, innovative index – designed to reflect the Canadian bank credit market – will serve as the Futures contract underlying and is now available to participants.
The CBC contract will be designed to complement existing fixed income instruments, like cash bonds, exchange-traded funds and total return swaps, while offering distinct benefits, such as:
- Targeted Credit Exposure: Gain direct exposure to the credit spread of Canadian banks through a futures contract built on a representative and liquid bond index.
- Expanded Yield Curve Access: Add new liquid points to the Canadian-listed yield curve, enhancing curve construction and trading precision.
- Efficient Hedging Tool: Manage spread risk, portfolio duration and liquidity needs with a standardized, exchange-traded solution.
- Versatile Trading Strategies: Implement tactical credit views, replicate synthetic long/short credit positions, or execute relative value trades.
Click on the above link for further information
