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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.

FX Volumes in London at $2,758bln/day in Apr 14

Volumes in April 2014 of $2,758bln/day (+6.6% from Oct 13 although still – 8.8% YonY), as shown in chart 1 below. The $171bln/day increase being attributed to $100bln/day increase in FX Swaps, which retains the largest share of trading at 51% of all volume, and to a $26bln/day increase in FX Spot volumes, with Spot accounting for 33% of total volumes, as shown in chart 2 below.

Chart 1: showing Daily FX vol by-product type (source: Bank of England Survey data)

Chart 2: showing Pct of daily FX vol by- product type (source: Bank of England Survey data)

Single-Dealer vs Multi-Dealer volumes

SDP vol -$27bln/day (-8% since Oct 13) at $309bln/day (-16% YonY)

MDP vol +$48bln/day (+15% since Oct 13) $362bln/day (+4% YonY)

A new high for MDP volumes at $362bln/day, slightly below the record high for SDP volumes set in Apr 13 of $366bln/day. Meanwhile, the ratio of FX flows being executed via SDPs compared to MDPs ( as shown by the continues red line in chart 3 below) continued to drop hitting a new low of 85% from 107% in Oct 13, and way below the all time high of 273% set in Oct 08 in the midst of the credit crisis. Recently reported record volumes from FXall certainly confirms the near term strength of MDPs.

Chart 3: showing SDP and MDP vols (source: Bank of England Survey data)

Looking at the flows from SDP to MDPs by-product, we can see in the chart 4 below (the two downward pointing red arrows) that the reason that the SDP/MDP ratio fell from 107% to a new low of 85% was due solely to the increase in MDP from FX Swaps and Spot FX.

Chart 4: showing SDP minus MDP vols by product (source: Bank of England Survey data)

FX volumes by Client Segment:

FX flows by client segments are pretty much unchanged in April 14. the chart 5 below shows all the client segment flows, and we can see that Other Financial Institutions flows now exceed the flows from non-reporting other banks.

Chart 5: FX flows by client segment (source: Bank of England Survey data)

looking at the execution preferences within client segments, in terms of SDP volumes, three of the four segments showed drops in volumes , with the biggest fall coming from Reporting Dealers -$19bln/day (-12% and -23% YonY). Whilst for MDPs, all segments showed gains  in Apr 14 compared to Oct 13 with the largest absolute gains coming from the other financial institutions. Looking at the data in chart 6 below, we can see the shift from SDP to MDPs across client segments shown by the dropping lines within the red circled area.

Chart 6: showing changes in FX vols by client segment (SDP-MDP vol)  (source: Bank of England Survey data)

 So, whats behind the shift in volumes from SDPs to MDPs, and will it continue? We will look at this in subsequent posts.

Data from Previous survey here

Filed under: FX, MDP, Paul Blank, Single-Dealer Platforms, Survey Results |