Platform FX Volumes July14: Double-digit falls for most platforms


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

Global FX Volumes: Top six centers, what’s the story?


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

BofE FX Survey data: FX vols recover in April 14 at $2,758bln/day (+6.6% on Oct 13, and -8.8% YonY) – interesting trends


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

Platform FX Volumes Jun14: Record vols at FXall, with all platforms showing gains


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

Volumes up across the board, led by FXall which continues to power ahead delivering a new record volumes of $141bln/day up 11pct on May, compared to more modest gains for other platform ranging from +5% to +8%. In terms of YoY changes, FXall is still the only platform showing gains with a 14.6% gain on Jun 13, whereas all the other platforms are still showing hefty falls ranging from down -25% to -40% on a year ago.

The uptick in volumes is reflected in the CLS settlement platform, which also reported a 13% increase to $5.46trn/day in terms of the value of trades submitted by banks for settlement.

Continue reading

Tibco Streambase 2014 FX Trading Technology survey


After a two-year break, during which Tibco acquired Streambase, it’s good to see that they are continuing the excellent FX Trading and Technology Trends survey, that Streambase published between 2010-12 (see here for 2011 and 2012 surveys).

I haven’t yet seen this years report, but if it’s similar to previous survey’s then it will focus on buy-side and sell-side traders and their use of electronic FX platforms.

Key findings being:

  • Share of FX participants trading electronically remains steady at 80%
  • Regulation seen as providing opportunities for innovation and competitive differentiation
  • Traders prefer executing on SDP to MDP
  • Expectation that bilateral relationship pricing from liquidity providers enhances execution quality
  • Fragmentation driving more firms are add additional liquidity providers via aggregation services

Top banks Continue reading

The future of Investment Banking (Oliver Wyman/Morgan Stanley)


What’s the outlook for Investment Banking in 2014 and beyond?

Well, according to a new report published by Oliver Wyman and Morgan Stanley, banks need to act fast and re-allocate capital and resources to optimise where they have real advantage, and focus regionally and domestically.

The report which includes results of client surveys suggests clients plan to ‘polarize’ their spend on partner banks and specialists in areas such as servicing multi-asset, whilst squeezing the rest.

This is a really fascinating report (link available at end of this post), well worth taking the time to read, some key takeaways from the report are:

Market under-estimates scope for wholesale banks to increase returns as they are forced to focus on business optimisation and resource allocations

Drivers being: Continue reading

EuroMoney 2014 FX Poll (Deutsche toppled from #1 spot)


Well, after nine years as #1 FX bank in the world, the ‘Mighty Deutsche’ has finally been toppled by Citigroup, who have been steadily gaining market share since 2008, and as the chart below shows it was only a matter of time before Citi overtook Deutsche.

Key findings from the EuroMoney 2014 survey:

  • Citi takes 1st place, with a market share of 16.04% (up from 14.9% in 2013) and more than doubling its 7.49% share from 2008. (see here for Citi Velocity post which is built using Caplin technology)
  • BAML sees largest gain in market share of top 50 up 1.3% to 4.38% (3.08% in 2013)
  • RBS sees biggest fall in market share of top 50 down -2.37% to 3.25% (5.62% in 2013)
  • Share of top 5 banks shows largest increase up 3.26% to 62.62% (57.36% in 2013)
  • Share of lower ranked banks from 16-50 gain share, whilst banks ranked 6-15 lose market share

Continue reading

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

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

BofE FX Survey data: $2,234bln/day (12% down from Apr, but 11% up YonY) – worth reading


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

Follow

Get every new post delivered to your Inbox.

Join 1,001 other followers