Pivoting over to the benchmark Henry Hub side of the market, I’ll say a similar thing to what Terry just talked about. When we look at our Henry Hub franchise, compare that to ICE’s Henry Hub franchise, you actually see that not only have we set a record total Henry Hub volume for futures and options in first quarter of this year, but we’ve also hit records of underlying options as well. From a competitive perspective, we actually grew our market share to 81% versus 80% last year, and that’s up from 77% in 2022. Our options business was actually up as well – I think we’re up at 66% market share, up from 59% market share last year. We want to be clear, and I think Terry laid this out well – in the markets where we have competitive dynamics, where we have our Henry Hub contracts against listed elsewhere, our WTI contracts against listed elsewhere, we’re maintaining stable share and we’re growing the OI.
With that, I’ll pass it back to you.
Terrence Duffy: Thanks Derek. Alex, hopefully that gives you some clarity.
Alex Blostein: Great, very helpful. Thanks guys.
Operator: Our next question now is from Ken Worthington with JPMC. Your line is open.
Ken Worthington: Hi, good morning. Thanks for taking the question. I wanted to extend the competitive landscape question to rates. FMX is launching later this summer. Do you see merits to the FMX value proposition? If so, which customer segments might FMX be best positioned to pursue, and given that Olive tried to compete with CME and rates in the past and have failed, what would you need to see to conclude that FMX might be different?
Terrence Duffy: Ken, let me answer this in this way. First of all, I have sat here for 22 years as the Chairman and CEO of this company since we went public, and I’ve seen nothing but competition my entire career, so this is no different. I take every single bit of competition seriously, as I’m sure others do about CME as we continue to move our business forward. We have about as much information as everybody else does on what their offering is, which is zero. I don’t know what their offering is, and I won’t say the party, but Tim just referenced our one pop margining that saves an additional $7 billion to $8 billion a day. We also have an additional offset with FIC, which we just got approved, which we have multiple clients using today that are exceeding 80% efficiencies using that service that we offer today, so we think we have a really strong offering going forward against whoever wants to compete in this product or any of our other asset classes.
We feel like we’re in a good position. We believe that capital efficiencies are the name of the game, and you have to have them. If you want to just do a me-too strategy, then people will do that. It’s a very attractive business – I get it, but again, I think you have to have the capital efficiencies. It’s hard to walk away from $7 billion, $8 billion a day in efficiencies, and it’s hard to walk away from an additional 80%-plus that they are receiving associated with FIC now and our new offering, that we just accomplished in the last several months. I think that’s very powerful, and that’s all I’ll say about what they’re doing.
Ken Worthington: Okay, great. Thank you.
Operator: Our next question is from Owen Lau with Oppenheimer. Sir, your line is open.
Owen Lau: Good morning. Thank you for taking my question. Just a quick one on the expense guidance. First quarter adjusted expense was lower than our expectation, but you maintained the full year guidance. Is there any investment that you paused in the first quarter that you expect to incur over the next few quarters, or is there some conservatism baked in here? Thanks.
Lynne Fitzpatrick: Thanks, Owen, for the question. We do have some project-based work that we do expect to ramp up over the course of the year for things like the Google migration, securities clearing that we’ve mentioned on the call previously. You’ll also see a ramp-up in terms of the consumption, so in the technology line as we’re moving more into the cloud, we will see that grow over the course of the year, so we do see some of those items growing as we move forward and then we do typically see that higher spend related to marketing events in the fourth quarter. There wasn’t a particular pause, I just think it’s timing on some of these project-based spends that we still expect to come through in the course of the year, making us comfortable with our guidance.
Owen Lau: Thanks a lot.
Operator: Our next question is from Michael Cyprys, Morgan Stanley. Sir, your line is open.
Michael Cyprys: Great, thank you. Just wanted to ask a question on the cash rates BrokerTec business and the interest rate swaps – both of those have seen a bit more limited growth. I was just hoping you could unpack some of the drivers and moving pieces there that you’re seeing. Maybe you could touch upon the competitive landscape, how you see that evolving, and what sort of potential uplift could we see to the BrokerTec business and interest rate swaps business from the cross-margining benefits that you have noted here on the call, and then maybe you could speak to some other initiatives that could help accelerate growth as you look out over the next year or two.
Terrence Duffy: Thanks Michael. I’m going to ask Tim to start, and I might join in as well and see where he goes. Tim?
Tim McCourt: Great, thanks Terry, and thanks Michael. Certainly when we look at our BrokerTec business, volatility has come in since the start of the year, and that tends to favor the internalization of flow with less being sent to our CLOB, and that’s what we’ve seen in Q1, so not necessarily surprising in that regard. We still do get some of the risk layoff and the risk recycling into the CLOB, so given the backdrop, not surprising where we are. But it’s important to note that when we look at the U.S. active CLOB, that’s only part of the story for BrokerTec. U.S. repo had a strong quarter where that year-to-date ADV is just about $300 billion per day – that’s up 5% year-over-year, and also the value prop of the BrokerTec platform remains extraordinary.
