Day: 25 January 2017

And Another Thing…

With a very pleasant “Happy Australia Day” to my local readers (none of whom will be actually reading this of course), I want to pose the question: Are systematic traders about to have a very bad three or four years?
I ask the question in all honestly, without wishing to provoke people (too much), because although I don’t know the answer I have a nagging doubt that FX market conditions are changing in a direction away from systematic trading towards discretionary.

FIA Calls for Wholesale Review of Financial Regulation

The head of the Futures Industry Association (FIA), Walt Lukken, has issued an open letter to the US President, Donald Trump, requesting an immediate review of all financial reform regulation.
“Now is the appropriate time to review and simplify the regulatory framework developed following the financial crisis and determine whether these regulations are in fact meeting their public objectives,” says Lukken in the letter.
Although he says that some areas of Dodd-Frank may warrant repeal, he argues that others – such as Title VII, which created the framework for the regulation and clearing of the swaps market – have led to significant improvements and may only require reform.

In Memoriam: David Hitchins

David Hitchins, managing director and head of the London FX team at Jefferies, passed away unexpectedly on Monday morning.

“We are extremely grieved to inform you of the untimely passing of an important and well-loved member of the Jefferies family,” said an email that went out from Jefferies announcing the news.

The email continued: “An industry veteran with twenty years of experience trading FX and FX derivatives, David was considered a visionary leader and an incredible team player who possessed a formidable work ethic. He was a loyal and trusted friend to many and a true gentleman. He will be greatly missed by all who knew him.

Eris Continues Expanding with Harrington Hire

George Harrington has joined Eris Exchange, which offers cash-settled swap futures as an alternative to traditional OTC swaps.
In his new role Harrington will lead the completion of on-boarding critical support providers for clearing, order management and execution. Eris Exchange says that he will be instrumental in rounding out its client offering and making its swap futures products more easily available to OTC swap users.
Harrington was formerly head of Bloomberg Global Markets, where he was responsible for the overall strategy and delivery of FIT, FXGO and EMSX.

The 2017 Profit & Loss Crystal Ball

Colin Lambert has retrieved the trusty Profit & Loss Crystal Ball from the dark recesses of the office, given it a wipe, and peered into the future to produce 10 predictions for 2017.

There is little doubt that as an industry foreign exchange is a more optimistic place than it was just 12 months ago – and hopefully the majority of themes in this year’s Crystal Ball reflect a more upbeat message.

es, the coming year will not be without the challenges of legal battles that have dogged the industry for the past three years, but if nothing else the shock factor has worn off and most people see what is happening as the continuation of a long process.

2016 Crystal Ball: How Did We Do Last Year?

In the interests of total transparency we also, as usual, cast our eye over last year’s predictions to see how they went. As always, these predictions will be viewed through rose-coloured spectacles to ensure we look as good as possible!

We kicked off last year’s predictions by suggesting the entire FX world would take a more realistic view of developments – that liquidity and spreads would reflect this thought process, and that market share would be a declining influence in business decisions.

Wall Street Blockchain Alliance Adds FX Specialist

OTC Exchange Network (OTCXN) has joined the The Wall Street Blockchain Alliance (WSBA) as a corporate member.

OTCXN is utilises blockchain technologies and smart contracts for its peer-to-peer trading network, which will launch initially for the FX market.

OTCXN’s trading platform leverages proprietary blockchain and smart contracts technology designed to provide transparency and operational controls to enable safe and secure trading directly between counterparties, even if they are not known to one another.

The aim of OTCXN is to replace the current credit system in FX, whereby firms are required to establish credit arrangements with prime brokers – a process that can take as long as 18 months to complete – in order to participate in the FX marketplace.

Less Volume, but More Automation

Data from the UK’s FX Joint Standing Committee (JSC) shows that while overall volumes dropped, e-ratios in spot and across the broader market both rose from April. Meanwhile in the US survey spot e-ratios dipped slightly, as they did across all FX products.
The JSC survey suggests the UK market had a spot e-ratio of 62.2%, the highest registered since the October 2012 survey. This is a significant increase on the 57.9% highlighted in the April 2016 survey and the 54.5% ratio in October 2015.