Deloitte 2016 Global FX survey


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

FX 2nd tier platform vols Feb16: Hotspot (+26.8%), whilst Fastmatch (-5.9%)


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.

2nd tier platform vols Feb 16

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

Electronic trading in fixed income markets: report by BIS (Bank of intl settlements) – worth reading!


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

Future of Single-Dealer Platforms: SIs, MTFs or OTFs?


An excellent article in Risk.net covered also in FXWeek, looks at the future of Single-Dealer Platforms under MiFID II and discusses the options for bank platforms.

Should they register as:

  • Systematic Internalisers (SIs), which enables them to utlilise their own risk capital and trade on bilateral basis with customers
  • Organised Trading Facilities (OTFs), in which case they cannot use their own capital, and would in effect be running an agency business, but cannot run both an SI adn OTF under the same legal entity
  • Multilateral Trading Facility (MTF), which offers all to all trading

Initially, the SI regime seems obvious, as they can deploy their own capital, and trade with clients on a bilateral basis, which is what most SDPs currently do.

The test for an SI is that it Continue reading

CLS FX Settlement Jan 16: value of transactions up 8.3% to $4.84trillion/day in Jan 16 (highest level since Jun 15)


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

FX 2nd tier platform vols Jan 16: Fastmatch (+24.3%) & Hotspot (+7.1%)


Second tier FX volumes showed gains in January, led by Fastmatch which reported a+24.3% rise to $11.8bn/day, whilst Hotspot reported a +7.1% gain.

2nd tier platform vols Jan 16

Table showing Second Tier platforms: Hotspot, Fastmatch vols for Jan 16

The charts below show the volumes comparisons between Hotspot and Fastmatch. Continue reading

FX Platforms Jan 16: Top tier FX platforms report strong gains, led by EBS +37%



The top-tier FX platforms have now released their Jan 2016 volumes.

In terms of Spot FX, all the major platforms delivered strong performances:

  • EBS +37.7% to $103bn/day ($74.8bn/day in Dec 15), still down –1.7% compared to Jan 15 level at $104.8bn/day
  • Reuters spot+35.2% to $123bn/day ($91bn/day in Dec 15), +16% compared to Jan 15 at $106bn/day
  • The CME +9.4% to $121bn/day ($111bn/day in Dec 15), up +1.1% compared to Jan 15 level of $120bn/day

In terms of other products, Continue reading