The Financial Post reports in its Wednesday edition that Montreal Exchange plans to launch a Canadian bank credit futures contract next year. A Bloomberg dispatch to the Post reports that 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. "The concept was to create a product that could repatriate credit hedging that had migrated to the U.S. market," said Karl Wildi, managing director of global markets with CIBC and a member of a working group that is behind the initiative. Investors are looking to diversify from U.S.-centric assets and investment products as President Donald Trump's tariffs threaten to destabilize economies. Most credit hedging in North America is done using the Markit CDX North American Investment Grade Index, a U.S.-dollar denominated benchmark that includes some Canadian credit. Montreal Exchange director Robert Tasca says, "CDX is definitely a very deep and liquid market and it is a market that Canadian investors are very comfortable with, but naturally there is divergence between Canada and the U.S. in terms of correlation."