EBS report near 10% fall in FX vols in Nov 15

Posted on December 3, 2015 by Paul Blank

EBS one of the major platforms in the FX market, has released weak Nov FX vols, which at $75.5bn/day are down nearly -10% on the $83.6bn/day reported in Oct, and a huge -38.6% down on the $123bn/day seen in Nov 14, and are now at the lowest levels since Jul 14 ($70.6bn/day).

EBS vols

EBS Monthly Volumes

Meanwhile, the CME futures market showed a much smaller decline with Nov vols of $89.1bn/day down a modest -3.2% on Oct 15, and off -23.3% compared to Nov 14, and the lowest since Aug 14 ($83.6bn/day).

Next week Reuters reports their figures and then we can compare and contrast the major FX platforms, although being Nov, it looks like a typical year end slowdown at the moment.

Filed under: FX, Paul Blank | Leave a comment »

FX 2nd tier platform vols Nov 15: Fastmatch & Hotspot vols down over 6% in Nov 15

Posted on December 1, 2015 by Paul Blank

 

Volumes continuing to decline with the approach year-end, and in terms of the second tier FX platforms, FastMatch vols fell -6.7% in Nov 15 to $8.4bn/day, following the +15.4% rise in October, although still down -33.2% compared to the Nov 14 level $12.6bn/day. Meanwhile Hotspot saw the third consecutive monthly fall, with vols down -6.3% to $22.4bn/day in Nov 15 (following the -8.6% fall in Oct), and down -31.7% compared to Nov 14.

2nd tier platform vols Nov 15

Table showing Second Tier platforms: Hotspot, Fastmatch vols for Nov 2015

The charts below show Continue reading →

Filed under: FX, Paul Blank | Leave a comment »

US regulators fine Barclays $150m for abuse of ‘last look’ (fascinating reading)

Posted on November 18, 2015 by Paul Blank

The NY Department of Financial Services (NYDFS), has handed Barclays an additional $150m penalty and ordered the bank to terminate an employee for what it called: ‘Automated, Electronic Foreign Exchange Trading Misconduct’

According to the NYDFS:

Barclays Used “Last Look” System to Automatically Reject Client Orders that Would Be Unprofitable Because of Subsequent Price Swings during Milliseconds-long Latency (“Hold”) Periods.

The additional fine brings the overall Barclays Foreign Exchange NYDFS Penalty to $635 Million.

That clearly explains why last month Barclays released ‘last look’ guidelines on their BARX website. In previous posts, I have argued that the practice of last look, in effect provides banks with ‘an option on the price’ that gives them an asymmetric advantage over their clients. The press release actually makes fascinating reading, and for that reason I have reproduced most of it below (the bold underline is from the original press release, and not my emphasis).

According to Anthony J. Albanese, Acting Superintendent of Financial Services” at NYDFS, in addition to the fines, Barclays would also: Continue reading →

Filed under: FX, last look, Paul Blank, Regulation | Leave a comment »

Great coup for EBS as ex-BARX Architect joins EBSBrokertec as Chief Strategist

Posted on November 16, 2015 by Paul Blank

Tim Cartledge most recently Global Head of FICC and electronic FX trading at Barclays, and instrumental in the development of Barclay’s BARX platform (along with Dave Cooney, now CEO of Mahi FX) is joining EBSBrokertec as Chief Strategy Officer, reporting to EBS CEO, Gil Mandelzis.

Tim will be responsible for leading and delivering on the strategic direction of EBS BrokerTec, following the successful integration of EBS and BrokerTec in July 2015. Tim brings significant expertise in electronic trading within both the foreign exchange and fixed income markets, at a time when EBS BrokerTec is bringing together its two leading central limit order book platforms and disclosed trading venues EBS Direct and BrokerTec Direct.

The obligatory quote from Tim in the PR states:

“The EBS and BrokerTec platforms are extremely well-regarded as industry leaders in the FX and fixed income markets. Over the past few years EBS has transformed itself into a multi-product, growth business and built a very strong foundation for expansion. EBS BrokerTec is exceptionally well positioned to lead the market in the years to come and I am looking forward to being part of this exciting journey”

In my view this is a really significant hire for EBS, and of course another example of the continual loss of senior talent from top-tier banks.

Full press release here

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ICAP results, and strategy for Electronic Markets and Post Trade Services

Posted on November 11, 2015 by Paul Blank

ICAP today released first half results, confirmed the sale of the Global Broking Business (IGBB) to Tullett Prebon, and as part of their investor presentation, provided more details on the NewCo that will comprise Electronic Broking and PostTrade Services group.

In terms of result, group revenue fell 4% to £595m, although after stripping out ICBB, would show 4% rise, whilst revenues at TriOptima the post trade division rose 35%.

ICAP reported they had invested Continue reading →

Filed under: FX, OTC, Paul Blank, Regulation | Leave a comment »

FX Platforms Oct 15 vols: Major platforms vols slightly lower, CME vols crash, whilst Fastmatch shines with double digit gains

Posted on November 10, 2015 by Paul Blank

Following weak Sept FX vols, the major OTC FX platforms reported further falls in October, with Reuters down -4.6% at $104bn/day, EBS down -6.5% at $83.6bn/day, whilst The CME futures exchange saw vols for all FX products collapse, down -22% at $92bn/day.

The only bright spot coming from second tier platform Fastmatch, which recorded a +15.4% gain to $9bn/day.

In terms of year on year changes, all platforms are now showing large falls, with Reuters Spot down -27.8% and EBS down -29.1% and CME down -36% compared to last Oct. Continue reading →

Filed under: FX, OTC, Paul Blank | 6 Comments »

ThomsonReuters integrates all of its FX transaction venues into next-generation FX Trading desktop

Posted on November 10, 2015 by Paul Blank

Thomson Reuters has announced they are integrating all of their FX transaction venues into next-generation FX Trading desktop, to streamline access to liquidity for the FX community; including advanced portfolio order management system for buy-side participants. The integration will include:

  • Request For Quote service -RFQ (FXall QuickTrade)
  • Continuous streaming prices -ESP (Bank Stream)
  • Central limit order books-CLOB (Matching, Order Book)
  • Conversational dealing platform (Dealing)

The new FX Trading desktop will also include Continue reading →

Filed under: FX, Paul Blank, Web trading technology | 2 Comments »

Thoughts on ICAP – Tulletts discussions

Posted on November 8, 2015 by Paul Blank

The discussions between Tulletts and ICAP whereby Tulletts will buy ICAP’s global broking business is a great move on the part of ICAP. They will offload the high cost, low margin global broking voice business, and focus on the high margin and growing electronic broking (EBSBrokertec) and post trade services (including Traiana and TriOptima) divisions.

Update 11 Nov: Tullett confirmed acquisition of  ICAP’s Global Broking Business for £1.1bln here

Looking at these two slides from their last investor presentations Continue reading →

Filed under: FX, OTC, Paul Blank | 1 Comment »

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

Posted on October 27, 2015 by Paul Blank

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 →

Filed under: FX, OTC, Paul Blank, Survey Results | Leave a comment »

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

Posted on October 20, 2015 by Paul Blank

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 →

Filed under: FX, OTC, Paul Blank, Regulation, Single-Dealer Platforms, Survey Results | Leave a comment »

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