What's behind CME's clearing fees growth in 2024?

The growth in CME's clearing fees in 2024 can be attributed to several key factors: 1. **Increase in Average Daily Volume (ADV)**: CME's ADV has shown significant growth, particularly in its U.S. Treasury futures and options, which grew by 12% year-over-year, reaching a new all-time high of 7.8 million contracts per day. This increase in trading volume directly contributes to higher clearing and transaction fees. 2. **Economic and Geopolitical Uncertainty**: Investors have turned to CME's markets to manage through economic and geopolitical uncertainty, leading to higher trading activity and subsequently higher fees. This reflects the role of CME as a safe haven for investors seeking to hedge risks during times of market instability. 3. **Interest Rate Changes**: The Federal Reserve's interest rate hikes have created favorable conditions for CME's interest rate futures, which saw a 35% rise in SOFR futures to a record ADV of 4.1 million contracts. This surge in interest rate-related futures trading contributes to the increase in clearing and transaction fees. 4. **Market Data and Information Services**: CME's market data and information services revenue also contributed to the overall revenue growth. This segment saw a 5.8% year-over-year increase, reflecting the value that market participants place on CME's data and analytics offerings. In summary, CME's clearing fees growth in 2024 is primarily driven by the increase in trading volumes, particularly in interest rate futures and U.S. Treasury products, and economic uncertainty, which has led to higher trading activity on its platforms.