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in Opinion, Profit & Loss

And Another Thing...

It’s not often I hear chatter of insider trading, especially in FX, so you can imagine my concern when I first heard such gossip a few weeks ago, and then had the accusations restated by other independent sources. Thankfully, further investigation seems to indicate no such practice, it has however highlighted another concern, and surprise, surprise, it involves algorithms! Last year I wrote about news-reading algos and their growing influence in FX markets, and again this year on February 19 I suggested the next big battleground for the markets will be co-location for news-reading algos. In the major centres these algos have been deployed without too much of an impact, mainly I suspect because there are enough liquidity providers able to react to events, or more pertinently, to stop their price stream for the second either side of the news release. The issue, as I perceive it, has been noticed in part because there have been some data surprises in recent weeks and months, most no...

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