Posted on March 7, 2014 by Paul Blank
Earlier this week I looked at how the adoption of eFX was accelerating and commented on the huge increase in the e-FX ratios at RBS in particular, which has risen from 8% of flows being electronic in 2010 to some 53% in 2013. A whopping 511% increase in their e-FX ratios.
So, it’s interesting to see in today’s FX week an article talking about how RBS is now ‘internalising’ upwards of Continue reading
Filed under: FX, Internalisation, Paul Blank, Single-Dealer Platforms, Web trading technology | Leave a comment »
Posted on March 4, 2014 by Paul Blank
The migration of foreign exchange trading from voice to electronic based trading has been gathering pace over the past few years.
Whilst exact e-FX ratios vary between banks, products, client segment and regions, recent research puts the e-FX ratio at anywhere between 50-70% of global totals (Greenwich Associates-70% and Aite Group -60%, and Bank of International Settlements at 50%)
Interestingly the adoption rate of e-FX is expected to accelerate as banks, in response to the ongoing investigations into irregularities around the FX fixing business (where traders are alleged to have colluded by sharing details of client order books) look to reduce the use of voice trading and migrate more flow over to the eFX channels.
There is much debate around how to ‘fix’ The Fix, including greater use of agency based algorithmic execution over a longer period of time, rather than the current limited ‘fixing window’, and some talk about moving to an exchange type model.
The FT has an article today talking about the migration to e-FX, and what was interesting for me was that for the first time, seeing actual bank FX volumes and their eFX ratios, which usually aren’t made available on a named basis, so below are some of the more interesting statistics. Continue reading
Filed under: FX, Paul Blank, Survey Results | 5 Comments »
Posted on March 3, 2014 by Paul Blank
Last week I attended the Association for Financial Markets in Europe (AFME) 9th annual European Market Liquidity Conference.
As always with AFME, there had some thoughtful speakers and topical panel discussions, as well as providing good forum for networking opportunities (including providing for the conference iPad’s pre-loaded with delegate names allowing you to reach out to them and make contact).
This year’s agenda focused on the new emerging market structures
- Liquidity in the new regulated market – the changing market structure
- Keynote address -Verena Ross, Exec Dir, ESMA
- Foreign Exchange:
The renminbi and other Asian currencies
Impact of regulation on development of the FX market place
- Fixed Income:
Development of exchange capabilities
Liquidity issue, what liquidity issue?
- Funding European economic growth: the obstacles and opportunities
Below are my notes and some comments from the sessions that I attended: Continue reading
Filed under: CCP, Dodd Frank, FX, OTC, OTF, Paul Blank, Regulation, SEF, SWAPS | Leave a comment »
Posted on February 28, 2014 by Paul Blank
Interesting article in FX Week, about banks pulling their liquidity provision back from a number of multi-bank platforms due to the high cost fee structures on those platforms.
According to Kurt Vom Scheidt, COO of Markets in Saxo Bank, speaking on a conference panel at FX Invest Europe in Frankfurt…
“With banks struggling to make adequate returns across the board, connections to expensive trading platforms are on the chopping board”
He further commented that…. Continue reading
Filed under: FX, MDP, Paul Blank, Single-Dealer Platforms | 3 Comments »
Posted on February 7, 2014 by Paul Blank
The three main OTC FX platforms have now reported their Jan 2014 volumes.
All three platforms delivered strong double-digit pct gains in volumes, with FXAll recording it’s highest single day trading volumes. The individual platforms results were as follows: Continue reading
Filed under: FX, OTC, Paul Blank | 2 Comments »
Posted on February 5, 2014 by Paul Blank
EBS the FX ECN platform owned by ICAP saw daily FX volumes rebound strongly in January, up 23% to $87.5bln/day from December’s multi-year low of $71bln/day, although still some -38.1% lower than a year ago.
In a conference call with Analysts, ICAP CEO, Michael Spencer also spoke about the new relationship based disclosed liquidity service called EBS Direct, which is now live with some 200 banks (made up of liquidity providers and price takers).
The service is delivered across the same technology as the EBS markets anonymous matching platform, but provides liquidity to price taking banks on a disclosed named basis. Although the current volumes are still small, they are growing at a strong rate, having been averaging under $500mln/day in November, by January they were averaging $2bln/day, with some days showing volumes of over $3bln/day. EBSDirect has launched a precious metals service. Continue reading
Filed under: FX, Paul Blank | 1 Comment »
Posted on January 28, 2014 by Paul Blank
The Bank of England today released their latest semi-annual FX turnover survey results for October 2013.
Highlights on overall London FX volumes
- Total FX vols down 12% since Apr at $2,234bln/day (up 11% YoY)
- FX Swaps account for 50% of total FX vols (up from 42% in Apr), highest share since Apr 09
- FX Spot account for 34% of total FX vols (down from 39% in Apr), lowest share since Apr 09
- Spot FX vol down 24% from Apr at 767bln/day (5% higher YoY)
- Spot USD/JPY vols 48% lower than Apr at $119bln/day (still 2nd most traded curr pair)
Execution via Multi-Dealer Platforms (MDP) and Single-Dealer Platforms (SDPs) both down approx 9% since Apr
- SDP vols – 9% (still up 21% YoY), driven by +31% increase in use by Reporting Dealers and +14% by other banks
- MDP vols -10% (up 53% YoY), driven by +77% rise in Non-Bank Financial Institutions
Detailed analysis and charts on the figures follows below. Continue reading
Filed under: FX, MDP, Paul Blank, Single-Dealer Platforms, Survey Results | 1 Comment »
Posted on January 20, 2014 by Paul Blank
Deutsche Bank released preliminary 2013 full year figures today, together with details of 4th quarter figures. Net revenues in the 4th quarter were EUR 6.6 billion, 16% below the prior year period. The decline largely reflecting weaker results in Corporate Banking & Securities (CB&S) and a smaller decrease in Global Transaction Banking (GTB) revenues, and the impact of regulatory fines (some EUR1.3bln).
The Corporate Banking & Securities (CB&S) division are home to the FX and fixed income businesses. Reading through the accompanying investor presentation, it seems that within Debt Sales & Trading, FX was the only Continue reading
Filed under: FX, Paul Blank, Web trading technology | Leave a comment »
Posted on January 14, 2014 by Paul Blank
Last year saw a proliferation of new FX venues with no less than five FX ECNs going live, as well as some important changes to trading protocols of existing ECN venues.
These changes and new venues reflect the heterogeneous nature of the $5.3trn/day global FX market, as venues setup to attract, retain or exclude certain types of market participant, or level the technology playing field and redress the balance between the needs of their core liquidity providers and the requirements of their customers.
Existing FX ECNs have also been feeling the pain over the past year, with both EBS and Reuters Spot matching daily volumes dropping to new multi-year lows in December.
The fall in Reuters and EBS volumes is in part due to Continue reading
Filed under: FX, Paul Blank, Web trading technology | 1 Comment »
Posted on January 14, 2014 by Paul Blank
Reuters has revised upwards their FXall December volumes.
FXall Dec volumes when initially released showed a drop of $8bln/day to $100bln, representing a 7% drop over November.
Now the figures have been revised upwards to $111bln, which is a $3bln/day gain and 3% increase over November, and rounding off the year with an 11% increase YonY, and retaining FXall’s position as the largest of the multi bank platforms.
15 Jan update: HotSpot has now released Dec figures, which show a small $2bln/day drop to $27.6bln/day (down 7.6% on Nov), but still a healthy 40.8% up YonY.
My thanks to LeapRate for bringing this correction to my attention.
Filed under: FX, Paul Blank | 2 Comments »