The world’s largest derivatives exchange operator, the Chicago Mercantile Exchange (CME), hit a technical glitch on Friday, November 26, freezing key benchmark prices for stock indexes, commodities and government bonds.
The outage affected the CME group due to a cooling problem in their CyrusOne data centers. In a statement, CME confirmed that the problem had forced a halt in all of its markets.
The failure left an immediate and widespread impact, leaving traders and brokers without live prices for key financial instruments.
Futures contracts for benchmarks including WTI crude, US 10-year Treasuries, the S&P 500 and the Nasdaq 100 were frozen.
Services on Electronic Brokerage Services (EBS) were also suspended, affecting trading for currency pairs such as the Euro/Dollar.
According to Reutersthe outage left market participants “flying blind” with many brokers pulling products from trading due to an inability to price them accurately.
Christopher Forbes of CMC Markets highlighted the unprecedented nature of the widespread outage, calling it a “pain in the ass” and expressing concern about the “unnecessary risk” of pricing without live data.
Analysts have also warned that the event could lead to increased volatility when markets reopen, as the CME is a cornerstone of the financial system, with average daily derivatives volume reaching 26.3 million contracts in October.
While the outage occurred during a period of typically lower liquidity following the US Thanksgiving holiday, it froze a primary source of price discovery for assets globally.
