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.

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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

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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

Reuters & EBS both sink to multi year low trading vols in Dec


The three main OTC FX platforms have now reported their end of year Dec 2013 volumes.

All three platforms saw falls in daily volumes in December, with Reuters Matching and EBS both recording multi-year lows, with EBS 12mth average vols dropping below that of FXAll for the first time. Continue reading

The anatomy of the global FX market (BIS research findings)


The Bank of International Settlements (BIS), has just released a in-depth analysis of the recently released 2013 Triennial FX Survey, looking at the changing structure of the FX market, and drawing some conclusions.

Some of this was covered in our recent coverage of the 2013 Triennial FX Survey, some of the key points of which are shown here, but worth reading the report in full.

  • Non-dealer financial institutions were the major drivers of FX turnover (much through the use of prime brokers)
  • The reporting dealer market, by contrast, has grown more slowly (partly due to internalisation of flow by top tier banks), and
  • Trading volume of non-financials (mostly corporates) has actually contracted
  • In today’s market structure, electronic trading dominates. It is the preferred trading channel, with a share above 50% for all customer segments.
  • Non-financial institutions mostly prefer direct contact with their relationship bank, either via the phone or via a single-bank platform.
  • Financial customers are less loyal to their dealer often trade either directly with dealers electronically direct electronic price streams), or indirectly via multi-bank platforms and electronic brokerage systems that were previously the exclusive venues of inter-dealer trading
  • Retail accounts for some 3.5-3.8% of daily FX volumes

The climb in FX turnover between 2010 and 2013 appears to have been mostly Continue reading

Global FX daily turnover reaches $5.345 trillion up 34% according to 2013 BIS Triennial Survey


The Bank of International Settlements (BIS), has released the latest 2013 Triennial Survey survey of global FX market volumes (the most authoritative survey of global FX market activity)

Headline items from the survey are:

  • Global FX turnover was 34% higher in April 2013 than in April 2010, with average daily turnover of $5.345 trillion/day compared to $3.971 trillion/day

BIS 2013 FX daily Volumes 1Daily FX volume by product ($ billions)

Continue reading

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