Frustration, Confusion Ripple Across Markets on CME Outage

Economic

Summary:

A CME data-center outage froze global futures trading, disrupting liquidity and hedging and causing widespread frustration across markets.

The Chicago Mercantile Exchange Group proudly describes itself as the place “where the world comes to manage risk.” Except on Friday, the world was shut out.

Trading of futures and options was halted due to a fault at a data center, spilling over into multiple markets and affecting contracts covering trillions of dollars. It hit S&P 500 futures as well as everything from Treasuries and US crude oil to gasoline and palm oil. EBS, a platform used in foreign exchanges, was restored at 12 p.m. London time after being down for several hours.

In Singapore, one oil trader said when the initial alert was issued around 10:30 a.m. local time on Friday, they thought it was a hoax because the trades and quotes were still streaming in. But a few minutes later, the screen suddenly froze and they were booted out of the Nymex platform.

With the go-to service out, screens that would usually be a flickering wall of numbers ground to a halt, and traders had to seek out other options to keep trading and operating.

“It’s pretty annoying. We wanted to price some equity index options,” said Gerald Gan, deputy chief investment officer at Singapore-based Reed Capital Partners. “My provider is scouring for alternatives, but I doubt the liquidity would be as ample as CME.”

Such reactions reflect how CME — which started in the late 1800s as the Chicago Butter and Egg Board — has grown to become an integral part of the global market machinery and a crucial part of traders’ daily work. On average in October, derivatives trading volumes amounted to more than 26 million contracts every day, according to data from the group.

On Nov. 20, open interest in CME’s US Treasury futures and options set an all-time high of 35.1 million contracts. About $1 trillion of notional value is traded daily in the E-mini S&P 500 and Nasdaq 100 futures alone.

Exchange outages have occurred frequently in recent years, with technology issues affecting pricing across platforms globally.

In June 2024, a glitch during a software update in June 2024 led the New York Stock Exchange to erroneously halt trading on about 40 stocks and display odd trades showing a 99% drop in prices. Earlier in the year, tech issues disrupted premarket Nasdaq trading for almost three hours.

In Europe, London Stock Exchange Group Plc suffered three outages in a few months at the end of 2023, including one that halted trading for thousands of shares.

The latest CME malfunction is already longer than a similar, hours-long outage due to a technical error in 2019, which will mean questions for the company, the data center operator and the extent of contingency plans.

‘Real Black Friday’

Commodity traders scrambled to work out what would happen when the US benchmarks for gasoline and diesel futures expired later in the day — that can involve delivering actual barrels when the market closes at the end of month. Some oil brokers questioned why they came to work, with volumes already expected to be low the day after Thanksgiving and unable to trade CME volumes.

On LinkedIn, one employee at Glencore commented “Real Black Friday” in response to a post on the issues.

The outage meant limited trading in Treasury futures. Elsewhere, cash bonds traded sporadically and volumes may be hit by the reduced ability of traders to hedge. There are alternative methods to hedge trades, such as through swap markets which became more active following the start of trading in London, according to traders.

Futures for European and UK bond markets trade on a different exchange and were unaffected.

In the foreign exchange market, one trader said prices on platforms were returning to normal, but when trading opened at 8 a.m. in London, some platforms initially showed elevated bid-offer spreads.

“We typically use derivatives for tactical trades but it’s obviously impossible this morning,” said Amelie Derambure, a portfolio manager at Amundi SA. “Thankfully, it’s a quiet day. It would have been quite a handicap had it been a busy day.”

Global Impact

Friday was set to be a subdued day for stock markets, with only a half day of trading in the US after the Thanksgiving holiday. There’s no US economic data scheduled and no Federal Reserve speakers ahead of a blackout period leading up to their December decision.

“Lucky it’s quiet post Thanksgiving,” said Emmanuel Valavanis, a London-based equity sales specialist at Forte Securities. “For this to happen on the last trading day of the month is bad enough, but coinciding with last day of year-end for many mutual funds compounds the potential issue. Freezing a trillion dollars is not a good look for those involved.”

Frustration, Confusion Ripple Across Markets on CME Outage_1

Some said they were staying away given the risks posed by the outage on a day when trading was already expected to be thinner.

“I am wary about trading on such an illiquid day, so I would not have wanted to trigger trades anyway,” said Rajeev De Mello, chief investment officer at Gama Asset Management. “And with this outage, all the more so.”

Source: Bloomberg

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Michelle

Forex

Economic

Inflation figures from the eurozone's major economies paint a mixed picture of the bloc's price prospects. In Germany, the region's biggest economy, the inflation rate unexpectedly rose to the highest level in nine months.

Mainly driven by food prices, as energy prices fell modestly, EU-harmonised inflation in Germany was 2.6% higher in November compared with the previous year, after inflation hit 2.3% in October of 2025. This is according to preliminary results from the Federal Statistical Office (Destatis).

Month-on-month, the harmonised inflation rate showed that German prices fell by 0.5% in November, from a 0.3% rise in October.

French prices are slow to rise

Elsewhere, it appears that Europe's price pressure is cooling following the region's post-pandemic cost-of-living crisis. Preliminary data released on Friday suggests French inflation remains subdued. According to flash estimates from INSEE, the country's EU-harmonised price index is projected to rise by 0.8% year-on-year in November, unchanged from the previous month and down from 1.7% a year earlier.

Economists had expected a stronger increase of 1%.

The stable reading reflects contrasting movements across spending categories: a slowdown in service prices, driven down by communication services, and a more pronounced decrease in manufactured goods prices, offset by a smaller decline in energy prices and a slight acceleration in food prices.

Month-over-month, French prices fell by 0.2% in November, after a 0.1% increase in October. The consensus forecast had pointed to no change.

The decline was driven by lower service prices, particularly in transport and communications, and to a lesser extent by cheaper manufactured goods. Energy prices are expected to rebound, led by petrol products, while tobacco prices are projected to edge higher. Food prices are expected to remain broadly stable.

Inflation in Italy

The EU's third-largest economy showed a similar pattern. Italy's harmonised index of consumer prices fell by 0.2% in November, matching October's decline, according to preliminary figures from the national statistics agency ISTAT.

Annual inflation eased to 1.1% from 1.3% in the previous month, which is its lowest level since October 2024.

Italian inflation remained low as falling energy prices and softer services inflation offset modest rises elsewhere. The largest downward pressures came from steep declines in regulated energy and communication services, alongside slower increases in transport and recreational services.

Only a few categories — mainly processed food and some unregulated energy products — added mild upward pressure.

Spanish prices are on the rise

Spain, the eurozone's fourth-largest economy, recorded somewhat stronger price pressures. The EU-harmonised index of consumer prices was flat in November following a 0.5% rise in October, defying expectations of a 0.2% monthly fall, according to preliminary data from the National Statistics Institute.

However, annual inflation came in higher than expected. The harmonised rate eased to 3.1% from 3.2% in October, compared with a forecast of 2.9%. Price rises for food, transport and other non-energy goods continued to drive inflation.

Friday's figures from the eurozone's major economies will inform the European Central Bank ahead of its meeting in December. The ECB is not expected to cut its key interest rate from the current 2%, with policymakers judging that medium-term inflation targets are broadly being met.

Eurozone inflation stood at 2.1% in October, slightly above the ECB's 2% target, reinforcing the bank's view that price pressures are largely under control after the surge to double-digit highs caused by post-pandemic supply shocks and the energy crisis triggered by Russia's invasion of Ukraine.

Meanwhile, inflation expectations have edged higher. According to a new ECB survey published on Friday, median consumer inflation expectations for the next year rose to 2.8% in October from 2.7% in September. Expectations for three years ahead were unchanged at 2.5%, while five-year-ahead expectations remained steady at 2.2%.

Source: Yahoo Finance

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Adam

Economic

The market is closing out November with all the intensity of a flickering candle in a well-lit room, an almost comical contrast to the drama that tried—unsuccessfully—to hijack the month. It’s only fitting that we coast into the finish on what is universally considered the most forgettable trading day of the year, a day when even the screens seem to yawn. And with CME’s derivatives plumbing briefly going dark? Well, if the market were ever going to have a systems outage, this was the moment. The Street is thinly staffed, the U.S. is still digesting turkey, and most institutional desks are already running on half-power secondary feeds. A rare case where a glitch becomes a feature, ensuring no one can put on a hero trade they’ll regret by Monday.

This soft yawn into the weekend caps a month that spent its early weeks trying to convince traders that the AI supercycle had finally run out of narrative rope. The whisper campaign about an AI bubble felt almost gleeful—every dip framed as the first crack in the silicon cathedral. But as the fear crescendoed, the Federal Reserve stepped in with the softest of tones, the kind that turns terminal rates into mush and revives risk like water on dry earth. Suddenly, cut expectations went vertical. A probability that sat at 39% just a week ago has vaulted to 85%, all because a few policymakers reminded us they still remember where they put the easing toolkit.

The repricing was textbook: the dollar caught the downdraft, logging its worst week in four months, while equities floated higher—not euphoric, not giddy, but relieved. It’s the kind of late-November drift that happens when the macro tide quietly shifts, and there’s no one at the helm willing to contradict it. Markets want to believe in the December cut. They want the Fed’s language to mean what they think it means. But the whole setup has the delicacy of an options vol surface on a holiday afternoon: one hawkish speech next week and we’re right back to questioning everything. Today, though, none of that matters. There is barely enough liquidity to price conviction, let alone express it.

The FX market is ending the week in classic Thanksgiving mode: tight ranges, thin liquidity, and very little appetite to force anything ahead of proper U.S. flow returning on Monday. The dollar is essentially drifting, still carrying a mild overvaluation premium on short-term models, and the bias into next week remains for DXY to ease back toward the 99.00 area as it converges with front-end rate pricing.

The one development with enough weight to tilt the FX market beyond the rate curve is the slow build-up in expectations around Russia–Ukraine negotiations. Putin’s latest remarks—that the Geneva draft could serve as a foundation for a deal—and confirmation that U.S. envoy Steve Witkoff will travel to Moscow next week have not moved oil markets yet, but traders are paying attention. The FX reaction function here is straightforward: any credible sign of progress would weaken the dollar and support the Euro and European high-beta currencies. This is one of the few catalysts with genuine asymmetry; peace risk takes a geopolitical premium out of USD and shifts momentum back toward European risk.

The euro enters this backdrop with a reasonably constructive setup amid dovish echoes from the Eccles building and the prospect of some peace in Eastern Europe.

My stance on EUR/USD into year-end remains positive, but the near-term driver isn’t European inflation or ECB rhetoric. The euro needs either confirmation of a December Fed cut from a non-dove or a geopolitical catalyst. Given the U.S. data vacuum until next week, any improvement in peace-deal expectations becomes the most immediate upside lever for EUR/USD.

For now, it’s a quiet end to the week, but the setup is clear: the dollar stays vulnerable, Europe stands to benefit from any geopolitical progress, and the first real moves will land once U.S. liquidity comes back online.So we sign off November on a whimper, not a crescendo.

All in all, it’s nothingburger of a day, wrapping up a month that flirted with panic, feigned crisis, and then—almost spitefully—resolved back into a soft, dovish glow. Liquidity is a rumour, positioning is frozen, and the most tradable thing on the blotter is the knowledge that nothing of real consequence will happen until the desks fill back up on Monday. And sometimes, after the theatrics of a long month, that kind of quiet is exactly the reset the tape needs.

Source: investing

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Adam

Economic

The boldest stock market calls for 2026 are starting to hit Wall Street — and some of them include a run to 8,000 for the S&P 500 (^GSPC) as the AI boom continues reshaping the economy and financial markets.

Deutsche Bank set a year-end 2026 price target of 8,000 for the benchmark index in a new outlook published on Tuesday, calling for "mid-teens returns" driven by stronger inflows, buybacks, and continued momentum in earnings, which have been especially strong so far in 2025.

S&P 500 companies grew earnings by 13.4% in the third quarter, according to FactSet.

"In 2026, we see robust earnings growth and equity valuations remaining elevated," Deutsche Bank's equities strategy team, led by Binky Chadha, wrote in the report.

That view sits at the upper end of Wall Street's expectations for next year. HSBC, for example, has a 2026 target of 7,500, while JPMorgan is calling for the S&P 500 to reach 7,500 with upside to 8,000 if the Fed continues to cut rates.

Morgan Stanley also expects a strong year, forecasting the index will finish 2026 at 7,800 amid what strategist Mike Wilson calls a "new bull market," arguing in a report last week that a rolling recession ended earlier this year and that policy support and earnings strength will continue into next year.

And more firms are leaning into the idea that the next phase of the bull market still has room to run.

Wells Fargo is in that camp, calling for a double-digit move higher in stocks over the next 12 months and a year-end 2026 target of 7,800. The bank expects a two-stage rally next year as the market shifts from a "reflation hope" trade in the first half to a stronger AI-driven surge in the second.

While Wells Fargo sees the AI boom echoing past periods of tech-led growth, it also cautions that the trade could become a bubble. The firm argues that policy and liquidity should keep the backdrop supportive heading into the midterm election cycle, but notes the market is becoming increasingly intertwined with the broader economy.

"A K-shaped economy led by wealth effect means a bear market could trigger an economic downturn, which neither the Fed nor the Gov't can afford especially into midterms," the bank's equity strategy team, led by Ohsung Kwon, wrote. The firm noted that equity gains have become increasingly tied to household wealth as the economy splits between the "haves" and the "have-nots."

JPMorgan lands in a similar place. The bank's baseline call for 2026 is a run toward 7,500, but it sees a path above 8,000 if an improved inflation outlook prompts the Fed to cut rates more aggressively. For now, JPMorgan expects two additional cuts before the central bank pauses.

Markets are currently pricing in an 83% chance that the central bank cuts interest rates by the end of its December meeting in two weeks, up from a roughly 30% chance seen just last week, according to the CME FedWatch Tool.

"Despite AI bubble and valuation concerns, we see current elevated multiples correctly anticipating above-trend earnings growth, an AI capex boom, rising shareholder payouts, and easier fiscal policy (i.e. [One Big Beautiful Bill Act])," JPMorgan lead equity strategist Dubravko Lakos-Bujas wrote.

"More so, the earnings benefit tied to deregulation and broadening AI-related productivity gains remain underappreciated," Lakos-Bujas added, projecting earnings growth of 13% to 15% over the next two years.

That boom, however, isn't unfolding in a vacuum. JPMorgan, like other firms, notes the AI shift is happening against a polarized economic backdrop: "This disruption is unfolding within an already unhealthy K-shaped economy, with AI expected to amplify this polarization even further."

HSBC is also leaning on that theme, initiating coverage on 2026 with a 7,500 price target that suggests "another year of double-digit gains mirroring the late 1990s equity boom."

Like JPMorgan, the bank expects the AI investment cycle to continue supporting earnings, even as lower-income consumers remain under pressure.

"While 2025 was marked by the policy fallout from Liberation Day tariffs, stricter immigration policy, and overall elevated uncertainty from trade to geopolitics to Fed independence, we expect 2026 to be marked by a two speed economy/market," the bank said.

Source: finance.yahoo

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Glendon

Cryptocurrency

Economic

The International Monetary Fund (IMF) released an explanatory video on its X account, highlighting the potential of tokenized markets to speed up asset trading while introducing severe risks, such as intensified flash crashes.

Tokenization removes the need for intermediaries by automating clearing and settlement directly in code, which early pilots have shown can cut costs and enable near-instant execution. While this paves the way for cheaper, programmable financial services, it can also amplify volatility, since automated trades fire off immediately with no buffers in between.

Tokenized Markets' benefits face volatility risks

Researchers note that tokenized systems allow near-instant settlement and more efficient use of collateral, reshaping how assets can trade around the clock. But the IMF warns that these benefits come with familiar risks: past episodes of automated trading have shown how quickly flash crashes can unfold, and layered smart contracts could make those shocks even sharper by triggering chain reactions under stress. On top of that, if platforms remain fragmented and don't interoperate, liquidity could get stuck in silos, undercutting the broader vision of unified, always-on markets.

The video points to historical precedents, such as the 1944 Bretton Woods system, in which governments fixed currencies to the U.S. dollar and gold, only for it to collapse into fiat and floating rates by the 1970s.

Such interventions shaped global finance for decades, signalling that regulators may soon embed tokenized assets under tighter regulatory oversight. BlackRock's BUIDL fund has surged to become the largest tokenized Treasury product, outpacing rivals like Franklin Templeton's fund through 2025.

Governments eye active tokenization role

This public video signals tokenization moving from a niche topic to a mainstream policy focus for the IMF, which has been following digital money developments for a while. Historically, governments don't stay on the sidelines when money evolves; they step in to regulate. As tokenized markets reach multibillion-dollar sizes, platforms will need to tackle these risks head-on to avoid heavy-handed interventions that could change the entire landscape.

Source: CryptoSlate

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Winkelmann

Political

Economic

Key points:

· China's CRBC, Shandong and Kenya's NSSF to expand highway

· China changes model of developing Africa infrastructure

· Kenya highway project financing split into debt, equity

Kenya and two Chinese state firms are launching construction of a $1.5 billion highway expansion on Friday, marking Beijing's return to major infrastructure development in the East African economy after a years-long hiatus.

The project, split into two phases, will be financed by the partners through a mix of debt and equity using a model that is gaining traction after China's traditional lending model raised concerns over borrowers' debt burdens.

"We don't have any room to borrow any more money," Kefa Seda, director general of the Public-Private Partnerships directorate at Kenya's finance ministry told Reuters ahead of the official launch ceremony.

The project will improve a key transport corridor that links Kenya's port of Mombasa with its western region and neighbouring landlocked states like Uganda, via Nairobi.

AS CHINA REPOSITIONS IN AFRICA, KENYA STRIKES A DEAL

After pumping billions of dollars into infrastructure projects, China cut its lending in Africa around 2019 as worries grew over debt sustainability in countries like Kenya.

Beijing pledged $50 billion in credit and investments over three years, however, at a summit with African leaders last year as it moves to reposition itself on the continent.

Kenya terminated a deal with a consortium led by France's Vinci SAfor the highway expansion project earlier this year.

The new agreement was announced during a state visit by Kenya's President William Ruto to Beijing in April.

Kenya is among Washington's closest African allies. And the rapprochement between Nairobi and Beijing angered U.S. PresidentDonald Trump, prompting Ruto to issue a public defence of the strategy, saying Kenya needed to boost exports into markets like China.

DEBT, EQUITY MIX AND A 28-YEAR TOLL CONCESSION

One phase of the highway project will cost $863 million and see China Road and Bridge Corporation partner with Kenya's state pension fund NSSF to expand two existing stretches of a single-lane, 139-kilometre (86-mile) highway into four- and six-lane dual-carriage roads, the Kenya National Highways Authority said.

In the second phase, Shandong Hi-Speed Road and Bridge International, a subsidiary of China's Shandong Hi-Speed Group, will develop an existing single-lane, 94-kilometre stretch of highway into a six-lane carriageway at a cost of $678.56 million.

Both total cost estimates include financing costs, KENHA said.

Deals for the two portions of the project will be split into 75% debt and 25% equity. NSSF will contribute 45% of the equity funding in the phase it is involved in.

The borrowing could come from Chinese commercial lenders and state entities like Export-Import Bank of China, Seda said.

The firms have until the end of 2027 to complete construction followed by a 28-year concession to collect tolls to recoup their investment and make a return.

Source: TradingView

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Adam

Economic

Trading of futures and options on the Chicago Mercantile Exchange was halted by a data-center fault, causing hours of disruption to markets across equities, foreign exchange, bonds and commodities.

The malfunction was caused by cooling system problems at a data center in the Chicago area, according to facility operator CyrusOne. Engineering teams have restarted several chillers and deployed temporary cooling equipment, a spokesperson said, without giving a time for the resumption of normal operations.

The halt is already longer than a similar, hours-long outage due to a technical error back in 2019 and underscores the reach of CME Group Inc. (CME) and its Globex electronic trading platform. It triggered widespread frustration as market participants contemplated the prospect of a lost trading session.

Millions of contracts tracking the S&P 500 (ES=F), Dow Jones Industrial Average (YM=F) and Nasdaq 100 (NQ=F) trade every weekday virtually around the clock on the CME, one of the world’s largest derivatives exchanges.

“It’s a bit like flying dark,” said Thomas Helaine, head of equity sales at TP ICAP Europe in Paris. “When you’re trading cash equity like us, US futures give you an indication of where the market is going before the open. I can only imagine how complicated it must be for derivatives desks.”

The outage halted trading of US Treasury futures, while European and UK bond markets that trade on a different exchange were unaffected. EBS, a platform used in foreign exchange, was impacted, hurting price discovery in the market.

For some traders, the timing of the disruption on Friday could cause particular inconvenience if it lasts, due to the need to roll positions from one monthly contract to another.

“Traders sitting with a position are certainly quite angry,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.

Gold saw erratic moves in early London trading, with the gap between bids and offers about 20 times wider than normal. US crude oil and palm oil on the Bursa Malaysia exchange were also affected. In commodities markets, Friday is the expiry day for gasoline and diesel futures that can be settled with delivery of the actual physical fuel, adding a further potential complication.

The disruption created challenges for equity-derivatives desks. Options on the S&P 500 representing roughly $600 billion in notional value were set to expire on Friday, according to data compiled by Bloomberg. While those contracts trade on the CBOE market, traders use CME-listed futures to delta-hedge their positions.

Some traders may attempt to use ETFs and Euro Stoxx futures delta-hedge SPX option positions, said Oliver Deutschmann, head of equity derivatives EMEA at Liquidnet, but neither provides a clean hedge.

“Market-makers may pull screen quotes and clients might struggle to get meaningful size done until futures resume trading,” Deutschmann said.

Lost Liquidity

Others reported that volumes had shifted onto alternative, operational platforms as liquidity and price transparency evaporated.

“Traders will be switching to alternative liquidity tools where they can,” said Nick Twidale, chief analyst at AT Global Markets in Sydney. “We’ve lost one of the market’s major liquidity sources. This heightens the risk of exacerbated moves if a big event occurs.”

Most US markets were closed on Thursday for the Thanksgiving holiday, and are due to reopen later for a shortened trading day. Thankfully for traders, there is limited news expected on Friday with no economic data scheduled for release in the US, and there are no expected Federal Reserve speakers ahead of a blackout period leading up to their anticipated December decision.

November has been a volatile month for equities, with the S&P 500 slumping as much as 4.7% amid concerns about the path of Fed rate cuts and valuations about artificial intelligence-linked stocks. The index has clawed back those losses and volatility has been falling all week, back near October lows. The US stock benchmark is close to erasing its monthly drop with one more session left before the final month of the year.

Bourses operated by CME include the Chicago Board of Trade, the New York Mercantile Exchange and the Commodity Exchange. CME also has a stake in other exchanges, including the Gulf Mercantile Exchange, which said in a notice to the market that it had also seen trade halted due to the cooling issue.