From the April 01, 2007 issue of Futures Magazine • Subscribe!

International News

Energy wars continue

The New York Mercantile Exchange (Nymex) is jumping into the global consolidation craze by purchasing a 10% stake in the Montreal Exchange (MX). Through a joint venture agreement, the exchanges also will form a new company, headquartered in Calgary, that will provide exchange-traded and over-the-counter crude oil, natural gas and electricity products to the Canadian markets. The MX offers financial derivatives.

Nymex’s main competitor, the Intercontinental Exchange (ICE), announced in early March, about two weeks after the Nymex/MX deal was announced, that it was partnering with TSX Group, parent company to the Toronto Stock Exchange, to launch a new exchange, which is a direct challenge to the MX’s position as the top player in the market. The stock exchange, to be called the DEX, will begin operations March 2009, after the expiry of a non compete deal between the TSX and the MX dating back to 1999. The Nymex/MX venture will compete head-to-head with the TSX’s Natural Gas Exchange.

EEX smear campaign

The Leipzig-based European Energy Exchange (EEX) has been scrambling to head off an internet-based smear campaign in Germany after users and journalists across the country received Powerpoint and Excel documents purporting to expose weaknesses in the exchange’s methodology for determining reference prices. The sender has not been identified, but a criminal investigation is underway.

Liffe patent case

U.K. patent laws are being put to the test in a lawsuit filed by former Liffe employee Pavel Pinkava, who helped develop Euronext.Liffe’s credit derivatives market. Pinkava worked in marketing, and helped not only structure the new products, but helped rejig the electronic trading platform LiffeConnect to handle them. A judge says that his contribution extended beyond his “normal duties,” and may entitle him to royalties.

24-hour meat and hot dollar

The CME will extend trading hours of its commodities complex to 23-hours-a-day beginning on June 4. This will include live cattle, feeder cattle, lean hogs, pork bellies and class III milk. Meantime, ICE anticipated taking the Dollar Index and other financial contracts on its New York Board of Trade subsidiary electronically in April after a March 16 testing period.

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