CLS FX Settlement: Value of transactions up modest 3.9% in Sept 15 (launches new FX fwds compression service)

The CLS FX settlement system has reported a modest +3.9% rise in the average daily value of FX trades settled through their platform in Sept 15, taking volumes back up to $4.8trillion/day (up from $4.6trillion/day in Aug 15), and the highest level since Jun 15, although still way below the high of the year of $5.3trillion/day in Jan 15.

The slight monthly rise, is slightly out of line with the modest falls in spot volumes reported by the major FX platforms earlier this month, which saw falls ranging from -8.4% for Reuters to -10.9% for EBS.

Details from the platform and charts are as follows: Continue reading

Inviting expert guest contributors to SingleDealerPlatforms blog

Dear Readers,

The blog is nearly six years old. During that time, it has built a loyal and focused following, by providing insight into the dealer-to-client e-trading space. Exploring new trends and emerging opportunities, and looking at the business, technical and regulatory challenges facing participants.

Given the focus, it’s not surprising the blog is popular within banks. Actually, over Continue reading

LMAX FX report: Restoring trust in global FX markets (well worth reading)

Just finished reading a new report and survey from exchange operator LMAX, called “Restoring trust in global FX markets – Striking a balance between transparency and efficiency”.

It’s detailed, with lots of charts and tables and expert opinions, and covers much ground, including topics explored in recent posts around transparency, the FEMR report, and the issue of last look and more.

David Mercer, CEO of LMAX starts by stating:

Liquidity providers (LPs) and market makers need to be rewarded for the risks they take, and in order to enjoy the benefits of transparent price discovery and firm liquidity, customers must meet the costs of the service provided. Fair execution must come at a fair price, and transparency cannot come at the cost of destroying liquidity provision.

Customers have benefited from new technology, with spread compression and lower commissions. However, traditional LPs have had to invest heavily in technology to support globally distributed client base, whilst facing ever more sophisticated buy-side customers and smaller, more naturally agile competitors in the realm of liquidity provision (ie: non-bank market makers).

Mercer, adds that there is much that LPs can learn from these new entrants, including:

elements of exchange-style trading that create a fairer trading environment.

Proposals currently being considered to enhance transparency in the FX market risk disadvantaging Continue reading

The Chinese Yuan now 4th largest payment currency (3rd most active EBS currency)

According to SWIFT’s RMB Tracker, the Chinese Yuan has entered the top four of world payment currencies by value in August 2015, overtaking the Japanese Yen and reaching a record high share of 2.79% in global payments.

In the last three years, the Renminbi RMB has overtaken seven currencies rising from position number 12 with a share of 0.84% in August 2012. The currency has also further established itself as the dominant currency for trade finance behind the USD.

Chinese Yuan rise

Rise of the Chinese Renminbi as payment currency

The latest SWIFT RMB Tracker report shows that the Renminbi is now: Continue reading

Mapping of Bond platforms in Europe (ICMA study)

An interesting report from The international Capital Markets Association (ICMA ), has mapped the features and coverage of European Bond Trading Platforms.

According to the report, the European bond market trading has become increasingly electronic due to a natural evolution of trading, and more recently, as a by-product of regulation. Market participants have a regulatory obligation to evidence best execution and meet transparency obligations, but more importantly need to source and optimise liquidity.

The fixed income landscape is currently very fragmented. The reduction in balance sheet due to Basel III combined with investors’ reluctance to trade has led to a diffusion of liquidity across platforms. This is particularly the case in corporate bonds where it is often heard that liquidity is “a mile wide and an inch deep”.

Here is a chart from a previous post which shows the lack of inventory being held by dealers, making it harder for investors to find the liquidity they require.

Bond inventoryChart showing Net Bond inventory held by primary dealers (McKinsey/Greenwich)

Sourcing and aggregating liquidity is paramount for sell-side and buy-side traders. Technology is the only way to enable these participants to uncover the liquidity available. Understanding the contrasts and capabilities of new and more traditional platforms, is the first step to choosing the best execution venue or information network available in the market.

ICMA has undertaken a Continue reading

EBS buys institutional platform Molten Markets

Interesting to see the announcement from EBSBrokerTec, that they are buying Molten Markets, the three-year old FX technology platform for asset managers and pension funds.

According to the PR, the acquisition of Molten Markets will enable EBS BrokerTec to provide asset managers with a sophisticated execution management system and innovative trade cost analysis. Leveraging Molten Markets’ assets and technology, as well as EBS BrokerTec’s extensive distribution network and liquidity provider (LP) relationships, will enable EBS BrokerTec to offer a unique range of solutions to the asset management industry, while at the same time enhancing its offering to its LP customers.

Molten Markets current product suite include: Continue reading

Investment Bank League Tables for 1st half 2015 (from Coalition research)

Here is a summary from the Coalition research report on Global & Regional Investment Bank League Tables for 1st half 2015.

  • JPMorgan continued to lead the global Investment Bank rankings with $13.2bn revenues, up $1.7bn YoY. Goldman Sachs remained second, followed by Deutsche and Citi ranked as equal third.
  • Banks with strong Macro Fixed income franchises outperformed those who are more dependent on Credit-related activities. JPMorgan retained FICC global leadership, followed by Citi and Deutsche Bank
  • Strong Prime Brokerage and Derivative houses (Morgan Stanley, Goldman Sachs, and JPMorgan) maintained their global Equities leadership
  • Goldman Sachs and JPMorgan continue to lead Origination, with M&A outperforming ECM and DCM
  • US Banks’ global strength is reflected in regional performance. Whereas rankings in APAC and EMEA were led by Deutsche Bank, Americans took three of the top five rankings in these regions and all top five rankings in their home region

Below are tables showing ranking, and link to how to request the report.

Continue reading


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