EBS, Reuters/FXall and CLS Mar14 FX vols (FXall record high)

The three main OTC FX platforms have now reported their Mar 2014 volumes.

Whilst Reuters matching saw a small drop in volumes and EBS a small rise, FXall saw strong growth. Hitting a new all time high, driven by record volumes in Chinese CNH on the back of recent intervention by the Chinese authorities to halt the one way bet on a continually rising Yuan.

FXall: $132bln/day, up 8.2% on the $122bln/day in Feb 2014, and some 20% up compared to Mar 2013 level of $110bln/day.

Reuters Matching: $110bln/day, down 2.7% on the $113bln/day in Feb 2014, and still some 16% down compared to Mar 2013 level of $131bln/day.

EBS: $88.4bln/day, up 5.9% on the $83.4bln/day in Feb 2014, but still a 26.6% down compared to Mar 2013 level of $120.4bln/day.

Hotspot: to be added once released.


FX Platform Volumes indexed Mar 2014

 FX volumes for Reuters, FXall and EBS- March 2014
(Chart indexed based at Jan 2011)


CLS value of trades submitted: $2,675bln/day, up 3.9% on the $2,575bln/day in Feb 2014, and 3.68% up compared to Mar 2013 level of $2,580bln/day.

CLS number of instructions submitted: 1,155,507, up 0.4% on the 1,150,663 in Feb 2014, and -5.12% down compared to Mar 2013 level of 1,217,817.

CLS Mar 14



Caplin Systems E-Trading Survey 2014 (please participate)

Caplin Systems E-Trading Survey 2014

As a reader of this blog, you have already demonstrated extreme good taste and sound judgement, and we would therefore value your feedback and participation in our survey.

Banks and brokers around the world use our technology to provide web-based trading services to their clients. We’d like to know what you think of those services and how they could be improved. To help us with our research, please click here to take our 2014 E-Trading Survey.

The survey should take around five minutes to complete. As a thank-you, we’ll send you an exclusive copy of the survey results, as well as our forthcoming white paper ‘Mobile trading trends in 2014 and beyond’.

Thanks in advance for your time.

Caplin Systems Research team

Deutsche partners with FIREapps and how SDPs can help

Deeper the insight a bank has into their corporate customers cash-flows and exposures the better the FX hedging solutions they can provide. However, even large multinational corporates often struggle to identify exposures in a timely manner.

So it’s interesting to see that Deutsche bank the global leader in FX has partnered with FIREapps to provide customers with solutions that identify and manage their overall currency exposures. FIREapps integrates with customers enterprise resource planning (ERP) systems, and Deutsche integrates with FIREapps.

According to Fabio Madar, Global Head of Corporate FX Sales at FIREapps:

Continue reading

Reuters overhauls spot matching rule book

Thomson Reuters has today announced an overhaul of the rule book which sets out acceptable behavior and practice within their FX Matching platform.

The changes, first mooted in December follow a long period of consultation and are designed to make the platform fairer and remove the ‘technology advantages’ that some electronic market makers and high frequency trading firms (HFT) have benefited from, and will help to level the playing field. The changes follow similar moves last year by rival EBS.

Amongst the changes are which will affect different currency pairs are:

Randomizing matching algorithm (which will prevent firms controlling ‘top of order book’)

Minimum  Quote Life (‘time in force’) (designed to reduce ‘order flashing’ and allow traders time to hit prices)

Minimum Tick Size (to reduce the amount of price updates and needless ‘gaming’ of the system)

Increase the quote to trade ratio (designed to promote intention to trade when quoting)

The moves, come as both Reuters Matching and EBS struggle to regain volumes to their platforms. With Reuters matching volumes in Feb 14 down 17.5% on Feb 13, whilst EBS Feb 14 volumes were down 44% on Feb 13.

FX Platform Volumes Feb 2014



Regional Banks investing in SDPs

We have discussed here a number of times how regional (commercial) banks have been ‘upping their game’, and investing in talented e-commerce people, better back-end pricing technology and importantly investing in new client facing single-dealer platforms (SDPs).

This investment enables the regional banks to better service their commercial clients and provide differentiated ‘workflow’ based solutions, that not only protects, but has been instrumental to them growing their client franchise, and gaining market share at the expense of the top global FX banks.

So, it’s interesting to see this theme is being picked up by Continue reading

How many SEFs will the market support?

There is a great post by Amir Khwaja of Clarus Financial over on Tabb Forum. Amir looks at the current SEF volumes and asks some questions about how many SEFs can the market support.

Continue reading

EBS and Reuters/FXall Feb14 FX vols

The three main OTC FX platforms have now reported their Feb 2014 volumes.

All platforms shown slight drops in volumes after the very strong January figures of last month.

FXall: $122bln/day, down 0.8% on the record $123bln/day in Jan 2014, and still 10.9% up compared to Feb 2013 level of $110bln/day.

Reuters Matching: $113bln/day, down 3.4% on the $117bln/day in Jan 2014, but still 17.5% down compared to Feb 2013 level of $137bln/day. Interestingly, the recent intervention by the Chinese authorities to halt the one way bet on a continually rising Yuan has seen the Chinese offshore Yuan the dollar vs CNH become the second most activity traded currency pair on Reuters matching in February.

EBS: $83.5bln/day, down 4.6% on on the $87.5bln/day in Jan 2014, but still a whopping 44% down compared to Feb 2013 level of $149bln/day.

Hotspot: to be added once released.

FX Platform Volumes Feb 2014FX volumes for Reuters, FXall and EBS- February 2014

I am starting to add CLS reported data showing the number and value of trades submitted to CLS for settlement.

CLS Feb 14

Finally, over on Marketfactory’s blog, I see that James Sinclair has an interesting extract of a presentation he gave to the BIS in Basel earlier this year on ECN platforms.

James uses the same venue reported data (with addition of CME) as I do for comparing the FX volumes of major platforms, with the addition of indexing the data from Dec 2009 and contrasting with CLS data, and comes up with some interesting slides.

MarketFactory-Secondary Platform relative performance

Internalisation of FX flows

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

e-FX adoption seen accelerating (partly due to FX fixing problems)

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

European Market Liquidity Conference – thoughts and comments

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


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