When the world changes, and needs a new market benchmark, ICE is there offering a solution. That was the message from ICE Senior Vice President Trabue Bland during a video interview at FIA EXPO 2023 with John Lothian News.
The conversation kicked off with a discussion of energy and energy transitions. Changes in energy markets are being driven by changes in the supply chain. The HOU crude oil futures contract is moving from a landlocked contract to one that is waterborne, Bland said. In Europe, the TTF natural gas contract became a massive price discovery contract when it grew in prominence after the Ukraine war broke out.
Underpinning all this change is an energy transition, with a shift into a greener generation of power, he said.
The discussion then shifted to the softs markets, where Bland elaborated on what the impact this year’s El Niño could have on these commodities, which include essential goods such as coffee, sugar, and cocoa. Bland said participants are getting nervous about getting supply and that ICE experienced the largest sugar delivery in the history of ICE Futures US. There is additional pressure on the markets from the regulators, especially about sourcing, he said. Tracking the source of a commodity can be a real challenge.
One of the most pressing topics of today’s financial markets is the environment, and the carbon markets are at the forefront of this domain. Bland said there was massive demand in the voluntary carbon markets to meet ESG goals.
Innovation in product offerings is a key driver for exchanges, and ICE is no exception. The interview delved into ICE’s approach to the micronization of contracts and the introduction of zero-day-to-expiration options. Bland was not interested in offering smaller contracts on ICE’s futures exchanges that would increase user costs while attracting retail clients, especially ones that have a high price tag to attract. Bland’s focus is on commercial participants, he said.
Finally, Bland shared a story about his involvement in the Boy Scouts. He said one of his sons earned the rank of Eagle Scout right before his 18th birthday. Bland said he just went on a trip to the Boy Scouts Northern Tier high adventure base in the Boundary Waters. Watching the Boy Scouts in action, all of whom were Eagle Scouts, was quite an experience.
