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Trading in futures and options on the CME was halted on Friday following a fault at a data centre, disrupting global equity, bond and commodity markets.
The outage at the CME, the worldโs largest derivatives exchange, began late on Thursday in the US and remained largely unresolved eight hours later as markets on Wall Street prepared to reopen after the Thanksgiving holiday.
Investors rely on CME futures to hedge their positions in markets ranging from Treasuries to stocks on the S&P 500, as well as pricing Wall Street indices at the market open.
โThe outage is exacerbating already thin liquidity post-US holidays, and on top itโs a half-day for most markets,โ saidย Rushabh Amin, multi-asset portfolio managerย at Allspring Global Investments.
In a statement on Friday, the CME blamed the halt in trading on a โcooling issueโ at a data centre 35 miles from the CMEโs headquarters in Chicago and operated by CyrusOne.
The CME added it was working to fix the issue โin the near termโ.
By 12pm London time, prices for futures linked to the S&P 500 index, WTI crude oil and gold had not been updated for several hours, according to data from LSEG and FactSet.
The disruption also hit the CMEโs EBS market, one of the worldโs largest currency trading venues, and its Chicago Board of Trade subsidiary, which handles trading in interest rate and US Treasury derivatives.
The CME said EBS would resume at midday London time, and that all active orders would be cancelled.
The exchange handled an average of 28.3mn contracts a day in the third quarter on futures tied to interest rates, treasuries, energy and equities.
Its last major outage was in 2019, when equity, bond and commodity markets were disrupted for three hours.
Fridayโs disruption comes on the final trading day of the month, when many options contracts will expire and traders typically shift their positions into new contracts.
One metals trader said they were โin the darkโ and waiting for an update from the CME โ including on what would happen to positions in contracts that expire on Friday. The exchange may permit market participantsย to โrollโ forward any such positions to Monday, the trader suggested.
Investors said that the blackout was making banks reluctant to trade in other marketsย such as bonds, swaps and currencies on Friday morning, pushing up transaction costs.ย
Even before the outage, global markets had been set for a quiet day following the Thanksgiving holiday, with no major economic data scheduled and US equity markets closing early. European stocks and bonds were broadly flat.
โItโs about the best day of the year for it to happen โ itโs pretty quiet,โ said the chief executive of a big hedge fund. โBut a very long outage for a key market utility and not much communication with [investors]. Someone must have left early for their Thanksgiving dinner.โ
The CME sold the 450,000 sq ft data centre in the suburbs outside Chicago to CyrusOne in 2016, in a $130mn sale and leaseback deal.
Unlike the giant new data centre projects that Big Tech groups are investing hundreds of billions of dollars in for artificial intelligence, the 109 megawatt facility is a more traditional data centre that relies on air conditioning to keep its giant ranks of servers at a stable temperature.
Based in Dallas, Texas, CyrusOne operates more than 55 data centres across the US, Europe and Asia. The company is owned by US private equity groups KKR and Global Infrastructure Partners.
CyrusOne did not respond to a request for comment.
The CME said on Friday morning its European government bond trading platform BrokerTec EU was open, but its other markets remained shut.
Additional reporting by Tim Bradshaw and Camilla Hodgson
