New Futures Contract Aims to Repatriate Credit Hedging to Canada

Montreal Exchange Inc. plans to launch a Canadian bank credit futures contract next year, at a time when heightened macro volatility is boosting global demand for access to the market.

The contract will be based on a new index from FTSE Russell that tracks the credit spreads of bonds issued by the six largest Canadian banks. It can be used to hedge credit risks and implement tactical strategies, according to the exchange.