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CME Group Chairman Emeritus on Gold, Currencies

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    CME Group Chairman Emeritus Leo Melamed on the challenges weighing on the markets.

  • Duration 6:05
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OK so what -- you look at the world's largest floor of the world's largest futures exchange got to wonder how it all really began.

Appetite right here at Leo Melamed chairman emeritus of the CME good to see you see you such a pleasure.

My pleasure to be your loans -- I'm really gonna have to dig deep though I've got to really.

-- -- you -- I'm dying to know exactly what you think of the trades these days and what the options market is telling us the message of the options market.

Well I'm gonna tell you that we suddenly got volatility all over the place because everybody's -- -- I won't say we're in a precarious situation.

In the United States but the whole world.

There's got a lot of problems and that salute really spells difficult markets and markets that are going sometimes both ways.

I mean one minute.

Gold is down below 16100 dollars announced today -- -- -- 2829 dollar -- how do you an expert in this stuff to read that and participate and make money off it.

Well it's not easy -- black.

You have to be nimble and you have to be willing fists kind of follow the trend when the trend develops the trending gold of course have been down for quite a bit but suddenly.

You know it's telling you that.

-- it recognizes the world has problems and when it does have problems where you run you run to go okay.

Now my question is because I was once at a black tie dinner with Leo and I swear in the middle of that he's got his Blackberry under the table buying.

I believe it was gold futures contracts probably it -- I think it was in the middle of the night Hong Kong.

So we weren't in Hong Kong but the trade was in the middle of the night and I thought to myself how did you know so did you know that even with gold.

Floundering the past couple of months that today we have a -- now of course.

Not that I mean.

The last couple of days you had a little bit of an indication that it was finding some sort of footing and it did in in spades as you know went up yesterday in quite a bit today.

So I don't know if this is a change in trend but it's possible and there is good reason for it because the world as I -- is in difficulty everywhere we look everywhere we look there's a problem this latest thing in Italy.

Tell what you think that's an it affects us I mean it -- strength anything that happens in Europe that shakes up Europe affects -- And so it not only affects the -- our.

RE if if there wasn't an Italian Lira but it affects the Euro because -- represents all the countries in Europe and certainly.

How long the dollar -- today that's the obvious to predict which way to tell -- because it's very very definitely.

I would I would just tell everybody that's trading.

To be willing to change their view -- it's going in both directions.

The end for instance has had a tremendous break and deservedly -- But then again it's gone so far that a reaction to two words gone.

Could happen any minute see you have to be a little -- how nimble and you have to be willing to change with the direction.

What is the number one futures market your watching right now.

Well actually.

Yen has been the market that I've watched for the last.

Month.

Because of the change in attitude in in Japan.

I kind of felt that it was going to break -- the way did they want to weaken the yen and they will do so and they didn't they didn't even get any.

Of flak from the G-20 to say that you're doing too much or you shouldn't be doing this which are sort of as a license to keep going.

We are doing that to in the US a lot of with a set right and everybody -- son somewhat.

Afraid of being too strong so there is -- I won't call it a currency war but there is certainly currency skirmishes.

What we've been doing is similar to what other.

Nations have been doing we've been.

-- making everything more liquid which affects the dollar and the dollar weakens.

It seems obvious that the yen would continue to weaken and that so a lot of people are shorting the -- and it is that a trait that could turn tail and -- It could in terms of all short term reaction to -- it word it's been going I think in the long in the long run the yen probably has more to go.

I have to ask you about exchanges okay that the CME obviously it was not part of the big acquisition the big -- merging trade that we've seen lately.

Of course -- -- C joining with the ice.

There is a rumor.

I'm not shocked that you probably know about this that the -- of course in the CME and may very well -- -- would you be in support of that kind.

I'm not going to comment and anything like that.

And you know like to try Leo literature -- I -- have no comment about that but but clearly there's opportunities all around the world and we're very much.

-- and obvious to them we.

Very much want to take advantage of them we've been expanding geographically.

All over the world where -- -- Lumpur.

Or China or Brazil and we've been doing it very very successful -- you're you're standing in the heart of market territory.

Have to sell mainly out that's why would think that the -- to porcelain wanna be a part of you or frankly any exchange but how how.

I can't speak for them but that we have done extremely well and we're very very strong position the CME group.

Internationally.

And geographically and organically.

Yesterday.

We just launched the first deliverable.

Chinese renminbi contract.

That's a big event that's historical.

And it's indicative of the fact that China was willing for -- -- do that.

They didn't if we need there are located do it but they did -- that we do it which is indicative of the fact.

The China recognizes.

They have to open up their borders.

Two international use an international competition and I think -- next 345 years it's gonna happen.

Leo Melamed trading brand new renminbi contracts and he invented.

The early -- futures markets it is great to see you thank you so much great to be -- was always Leo Melamed wouldn't quite -- of the Deutsche Boerse merger rumor about Syria me.

Closing bell --

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