Posted on April 11, 2016 by Paul Blank
In terms of Spot FX, all the major platforms delivered lower results in Mar 16.
- EBS -18.4% to $83.7bn/day ($102.6bn/day in Feb 16), down -26.9% compared to Mar 15 level of $114.5bn/day
- Reuters spot -6.3% to $104bn/day ($111bn/day in Feb 16), down -21.2% compared to Mar 15 of $132bn/day
- The CME -4.2% to $114bn/day ($119bn/day in Feb 16), down -16.1% compared to Mar 15 level of $136bn/day
In terms of other products, Reuters showed a rise of Continue reading →
Filed under: FX, OTC, Paul Blank, Survey Results | Leave a comment »
Posted on April 10, 2016 by Paul Blank
Second tier FX volumes reported weak volumes figures in Mar 16, with Hotspot showing a -19% fall to $26.4bn/day, whilst FastMatch reported a smaller decline of -9% to $10.1bn/day.
Table showing Second Tier platforms: Hotspot, Fastmatch vols for Mar 16
Meanwhile the only top-tier platform to report is The CME group, which showed Mar 16 volumes for The CME of $114bn/day, down -4.2%. Full analysis of the top-tier platforms next week, by which time Reuters and EBS will also report their volumes as well.
The charts below show the volumes comparisons between Hotspot and FastMatch. The bottom chart shows the gap between Hotspot and FastMatch. The Mar decline in Hotspot vols has caused the difference between the two platforms volumes to drop back from the top of the downward sloping channel.
Chart showing the gap between Hotspot and Fastmatch spot FX (Hotspot-FastMatch) vols for Mar 16
Filed under: FX, Paul Blank, Survey Results | 1 Comment »
Posted on April 4, 2016 by Paul Blank
Interesting comparison from GreySpark in their latest research report. Comparing the digital transformation of investment banking to the automation of manufacturing processes in industries such as motor and aircraft manufacturers.
Their report draws analogies, between investment banking, and the motor and aircraft industries, which also experienced heavy regulatory burden, regular government interference, ever evolving demand patterns, regular bouts of over-capacity and a critical requirement to pool resources in order to innovate.
In their opinion, banks will reinvent their operating models on three pillars:
- A fully-automated manufacturing plant for the creation, assembly and packaging of financial products and services.
- A multi-channel distribution franchise that provides a consistent user experience for all interactions between the bank and its clients.
- Data managed as an asset across the entire supply chain.
The adoption of this new operating model has significant implications:
- Investment banks’ supply and value chains will invariably extend beyond the enterprise and incorporate suppliers, partners, market infrastructure and shared utilities.
- The number of joint-ventures and strategic alliances between complementary institutions will multiply as banks focus on their core expertise, client franchises and geographies.
- As value creation will be effectively distributed across functions, the manner in which it is accounted for will also change – determining where key decisions are made and how individual contributions are rewarded.
Link to report here (behind paywall):
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Posted on March 21, 2016 by Paul Blank
In terms of Spot FX, all the major platforms delivered lower results in Feb 16.
- EBS -1.2% to $102.6bn/day ($103.8bn/day in Jan 16), up +9% compared to Feb 15 level at $94.1bn/day
- Reuters spot -9.8% to $111bn/day ($123bn/day in Jan 16), -2.6% compared to Feb 15 at $114bn/day
- The CME -1.7% to $119bn/day ($121bn/day in Jan 16), up +26.1% compared to Feb 15 level of $94bn/day
In terms of other products, Continue reading →
Filed under: FX, Paul Blank, Survey Results | 3 Comments »
Posted on March 14, 2016 by Paul Blank
An interesting FX survey from Deloitte provides insight into the challenges corporations encounter when managing currency risk and possible causes (and solutions) for these challenges, as well as FX risk management structures, strategies, and processes adopted by companies across the globe.
Key findings are summarized below:
- Treasury challenges: Lack of visibility into FX exposures and reliable forecasts and the manual nature of exposure quantification is a challenge for nearly 60 percent of respondents.
- The board agenda: The survey suggests that boards do not always receive sufficient information in relation to FX risk. Executive management could challenge its
treasurers more in order to better understand the impact of FX risk hedging strategies on profit margins.
- Treasury structures: FX risk is predominantly managed via a central structure with 93 percent of respondents using a centralized treasury or in-house bank model, sometimes complemented by regional treasury centers.
Continue reading →
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Posted on March 6, 2016 by Paul Blank
Second tier FX volumes showed gains in Feb 16, led by Hotspot which reported a strong +26.8% rise to $32.6bn/day, whilst FastMatch reported a most -5.9% decline.
Table showing Second Tier platforms: Hotspot, Fastmatch vols for Feb 16
Meanwhile two of the first tier platforms have reported their Feb volumes, with EBS -1.2% at $102.6bn/day and The CME group down -1.7% at $119bn/day. Full analysis next week when Reuters will also report their volumes as well. Continue reading →
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Posted on February 25, 2016 by Paul Blank
An interesting report (well worth reading), published in January by The BIS (Bank of international settlements), looks at the impact of ‘electronification’ of the fixed income markets. The report was based on structured interviews with market participants, and a survey of electronic trading platforms.
It argues that advances in technology and regulatory changes have significantly affected the economics of intermediation in fixed income markets and that electronification is changing the behaviour of investors. The rise of electronic trading is creating efficiencies for many market participants, improving market quality in normal times, lowering transaction costs and reducing market segmentation, while at the same time Continue reading →
Filed under: Corporate Bonds, OTC, Regulation, Single-Dealer Platforms, Survey Results | Leave a comment »
Posted on February 15, 2016 by Paul Blank
The CLS FX settlement system has reported a healthy +8.3% increase in the ADV of FX trades settled through their platform in Jan 16, taking volumes back up to $4.84trillion/day (up from $4.47trillion/day in Dec 15). This is the highest level since Jun 15, although still down -8.9% on Jan 15.
In terms of number of transactions settled, these showed a strong gain, up +30% to 1,249,226 in Jan 16, although still down –12% on Jan 15 level of 1,419,369.
Details from the platform and charts are as follows: Continue reading →
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Posted on January 26, 2016 by Paul Blank
The Bank of England today released their latest semi-annual FX turnover survey results for Oct 2015.
Highlights on London FX volumes for Oct 2015
- Total FX volume of $2,148bn/day, down -13.4% compared to Apr 15, and down -21% compared to a year earlier, and the lowest volumes since Oct 12.
- All product volume fell:
- Spot -24% at $737bn/day (and down -34% on year earlier, to lowest since Oct 12)
- FX Options – 24%
- NDFs -16% and FWD -13% although FX Swaps were only -2%
- Turnover fell in most currency pairs:
- EUR/USD down -17% to $640bn/day
- Only three in top 22 currency pairs rose:
- USD/AUD +8%
- USD/CNY + 3%
- USD/KRW +11%.
Continue reading →
Filed under: FX, Paul Blank, Survey Results | 2 Comments »
Posted on January 11, 2016 by Paul Blank
A Reuters press release on FX Options caught my eye today. The announcement states that:
Thomson Reuters FX dealer-to-client venue saw a surge in options trading volumes of 166 percent in 2015 compared with the previous year. In particular the fourth quarter of 2015 saw record-high monthly, weekly and daily volumes with over 36 global and local active options price-makers and more than 225 active options price-takers now on Thomson Reuters FX platform.
Thomson Reuters FX Trading provides both relationship trading (bank-to-client) and bi-lateral trading (interbank) for vanilla and exotic FX options. In recent months the company has introduced electronic FX options callouts to streamline how banks can access options liquidity in the interbank market. By providing one single point of access to options liquidity via electronic callouts or via Thomson Reuters FXall dealer-to-client request-for-quote service, FX Trading helps market participants to efficiently manage their trading risk.
According to Phil Weisberg, Global Head of FX at Reuters: Continue reading →
Filed under: FX, Paul Blank, Regulation, Survey Results | Leave a comment »
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