Posted on August 18, 2014 by Paul Blank
Top tier banks have been offering mobile solutions to their institutional clients for a while now, ranging from research and indicative pricing, through to enabling clients to manage existing and in some cases placing new orders. With early compliance and security concerns having been addressed, banks such as Citi and JP Morgan are providing full mobile click and trade functionality.
But what about regional banks, what is their attitude towards mobile trading for corporate customers?
Here at Caplin, we are certainly seeing interest from a number of Continue reading
Filed under: FX, Mobile, Paul Blank, Single-Dealer Platforms | Leave a comment »
Posted on August 11, 2014 by Paul Blank
Major platforms have reported July FX volumes, with double-digit falls across the board, with Thomson Reuters (TR) spot vols down -14.5% to $98.8bln/day – a record low, whilst taken in total all Reuters FX products are down -11.4%, although still up some 7.6% on a year ago. Overall spot volumes across all platforms are down between -16% and -21% compared to a year ago.
This drop in FX volumes is also reflected in CLS settlement system which reported a -13.7% drop in trades submitted to their platform at $4,710bln/day down from $5,460bln/day in June, although still up 5.4% on a year ago, whilst the number of trades submitted for clearing is down -20.2% over the year.
From this month, TR has changed their reporting methodology, reporting aggregated volume for Reuters Matching, FXall and the Thomson Reuters SEF. Only splitting out volumes for FX spot and aggregating all other products covering: forwards, swaps, options and non-deliverable forwards traded on those platforms. FXall volumes shown in previous months post here.
Individual platform volumes are as follows: Continue reading
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Posted on July 31, 2014 by Paul Blank
The major central banks representing the top six FX trading centres have now published their semi-annual FX volume surveys data for April 2014, so what’s the story?
Key findings from top 6 FX centres:
- Total daily FX vol up 4.3% at $4,530bn/day in Apr 14 ($4,345bn/day in Oct 13), although still down -9.7% YonY
- Spot vol down -26.6% YonY, whilst NY spot volume is down even more at -32.2%
- Top 6 trading centers share of total global FX rose to 85% compared to 80% in 2010 (compared BIS 2013 & 2010 triennial data)
- Compared to six months ago:
- London +6.6%, Singapore 7.6% & Canada +9.1%
- NY -0.6%, Australia -0.9% & Japan -2.6%
- Compared to a year ago:
- Japan +4.3%
- NY -19.5%, London -8.8% , Australia -7.9% , Singapore -5.5% & Canada -5.1%
- London SDP flows 11% of total (down from 13%) & MDP flows at 13% (up from 12%): SDP/MDP 85% (107% in Oct 13)
- Canada SDP flows 13% of total (down from 15%) & MDP flows at 8% (up from 7%): SDP/MDP 163% (214% in Oct 13)
Looking in more detail we can see; Continue reading
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Posted on July 29, 2014 by Paul Blank
The Bank of England today released their latest semi-annual FX turnover survey results for April 2014.
Highlights on London FX volumes for April 2014
- FX vol of $2,758bln/day, +$171bln/day, which is +6.6% from Oct13 (although still -8.8% YoY)
- MDP vol of +15% from Oct13 at $362bln/day (+4% YonY)
- SDP vol -8% from Oct13 at $309bln/day (-16% YonY)
- Ratio of SDP/MDP vols at new low of 85% from 107% in Oct
Below are full details, charts and some interesting observations on the data. Continue reading
Filed under: FX, MDP, Paul Blank, Single-Dealer Platforms, Survey Results | 1 Comment »
Posted on July 24, 2014 by Paul Blank
Regulation is driving change in capital market structure, and as highlighted in the future of investment banking, banks continue to move towards a ‘capital-lite’ business model, as they seek to ‘optimise’ use of and return on capital.
The introduction of mandatory trading and clearing for standardised swaps (SEFs in US and OTF and MTFs in Europe) has resulted in higher capital charges for OTC bilateral trades, and reduced the appetite of banks to warehouse and hold inventory which is moving more banks towards a ‘capital lite’ model.
This is the backdrop to the announcement that JP Morgan the setting up a 150 strong fixed income agency execution desk called JP Morgan Execution Services (JPMES), to run alongside its principal trading operations.
At first sight, it looks as if JP Morgan is simply hedging its bets and backing both agency and principal business models. However,
Filed under: CCP, OTF, Paul Blank, Regulation, SEF, SWAPS, Web trading technology | Leave a comment »
Posted on July 17, 2014 by Paul Blank
We have discussed before how regional (commercial) banks have been ‘upping their game’, investing in talented e-commerce people, enhancing their back-end pricing technology and importantly investing in new client facing single-dealer platforms (SDPs).
As a result of this focused investment, regional banks have been steadily gaining market share, sometimes at the expense of the large global banks as they deliver ever greater value to their client franchise through their SDPs.
This trend can be clearly seen in the chart below Continue reading
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Posted on July 15, 2014 by Paul Blank
The Swiss based Financial Stability Board (FSB), has published an interesting consultative paper, Foreign Exchange Benchmarks Consultative Report.
The paper looks at FX market structure, and how that created incentives for market malpractice – mainly in the form of allegations of front running client orders, collusion between bank dealers sharing information on client orders, and manipulation of rates during fixing – linked to the structure of trading around the benchmark fixings. The paper makes recommendations to address these adverse incentives as well as examining how to improve the construction of the benchmarks themselves.
The main FX benchmarks used by market participants are the WM/Reuters London and ECB reference rate. Unlike Libor, these benchmarks are based on actual trading activity during a fixing window. FX benchmarks are used by market participants for a variety of purposes, but most notably for valuing, transferring and rebalancing multi-currency asset portfolios.
This market structure creates what the report terms as an: Continue reading
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