Month: February 2019

Moore Leaves BBH

Jay Moore has left his role as senior vice president and global head of currency administration at Brown Brothers Harriman (BBH).Moore joined BBH in 2012 to lead the product development efforts for FX, before subsequently transitioning to build and run the currency administration business for the firm.Prior to joining BBH, he was the global head of the currency management and portfolio solutions strategy teams for State Street Global Markets, where he worked between 1997 and 2012. In his roles, Moore was responsible for all functions related to the business including, product development and innovation, management, research, agency trading, technology, portfolio management, operations and sales.

FastMatch: Broadening its Horizons

In 2016 Fastmatch saw year-on-year average daily volumes (ADV) on its platform grow by 54%, and no doubt this growth was at least partially responsible for Euronext’s decision to spend $153 million to purchase 90% of the platform in August 2017, as it subsequently registered a 44% increase in ADV for that year. 2018 saw strong, if not as spectacular, year-on-year ADV growth of 9% to $20.1 billion, but Kevin Wolf, CEO of FastMatch and head of FICC US at Euronext, instead highlights the increase in the number of clients using the platform as the key growth metric for the year. “When we think about client acquisitions, we break it down along two dimensions: one is the number of clients and the other is the diversity of clients,” he explains.

A Rising Tide Lifts All

If the numbers are anything to go by, 2018 was a good year for OTC FX platforms, says Galen Stops.2018 saw the spot volumes increase across all of the multidealer OTC FX platforms that report this data, something that has not happened once in the past five years. Talk to the platform providers about what they saw as the key drivers of trading volumes in 2018 and they largely cite the same factors, chief amongst these being a proper decoupling of US interest rates relative to the rest of the world.

Ideal Prediction Adds Scope to Product Roster

Analytics and data science company Ideal Prediction, has unveiled Scope, an automated monitoring service, which analyses the behaviours of voice traders and trading algorithms in line with the principles of the FX Global Code.
The firm says Scope is already in production and automatically monitors order and trade activity, evidencing that humans and algorithms adhere to governance and risk controls. It specifically highlights potential issues like last look, spoofing, flashing, layering, order violations, limit breaches, and P&L flags, the company adds.

Cboe FX: Driven by Data

In terms of volumes, Cboe FX indisputably had a great year in 2018. It’s average daily volume for the year was $37.4 billion, it’s highest ever recorded and a 27% increase from 2017. Breaking down this figure further, the ADV on the London matching engine doubled, there was a 35% increase in trading activity during European or Asian hours, CNH trading on the platform doubled to become the sixth most actively traded currency on the platform and there was good growth in its full amount offering which accounted for $3.5 billion in Q4 of 2018, up 600% year-on-year. Discussing what prompted such an uptick in trading activity, senior staff at Cboe FX point to investments in technology and infrastructure that occurred in 2017, in addition to the fact that the full amount platform was re-built in 2018.

The Profit & Loss Crystal Ball

Once again, it’s that time of year when our editorial staff dust off the infamous Profit & Loss crystal ball in order to take a peek into the future and tell our readers what they should expect from the year ahead. Colin Lambert’s “Trade of the Year” makes a welcome return, and he’s back with a bang as he focuses on the drivers of the ever-popular NOK/MXN pair. As has become custom, Lambert is also predicting consolidation within the FX industry, but regular readers might just be surprised to find out that for once he doesn’t think that the M&A activity will be on the platform side this year.

In the FICC of It

In this week’s podcast Colin Lambert and Galen Stops discuss the article penned for Profit & Loss by former FX trader Rohan Ramchandani about his trial and subsequent acquittal for market manipulation. While they generally agree on most points there is, inevitably, areas of disagreement, but that is nothing compared to when they move on (thanks to a quiet news week) to how they ranked each other’s predictions for 2018. The results are available on the website, but why did Stops given Lambert a 6/10 for a bitcoin prediction that was actually correct? And why did Lambert return the compliment given Stops just a 4/10 for his own crypto prediction? All will be revealed in this week’s In the FICC of It podcast, along with exactly which one of them scored the most points with their predictions.

Nostradamus with Splinters

Having taken a look at Galen Stops’ predictions for 2018, Colin Lambert decides that overall he didn’t do a bad job, but there is an obvious reason why…Obviously having been a very generous marker over the years when assessing my own predictions from the previous year I have now swung 180 degrees and plan on being as critical as possible when looking at Galen’s five key themes for 2018. The problem is that, overall, he didn’t do too badly. Firstly, he suggested that 2018 could be the year that active currency management makes a comeback, although – and this is a theme of this review – there was a caveat because the headline ended with the words “sort of”.

EBS: An Expanded Franchise

Despite a general uptick in trading volumes in 2018, G3 volumes were – from a historical perspective – relatively subdued. Once upon a time this would have spelled bad news for EBS, but it is a testament to how the business has evolved in recent years that its spot FX volumes were instead actually up 9.5% year-on-year. “It’s been a big story around emerging market currencies and last year we observed a big increase in volumes in Asian currencies in particular,” says Seth Johnson, CEO of cash markets at CME Group, which owns EBS. “Fortunately for us, that’s a pretty good part of our franchise now. Most of our growth in the last three years has been driven out of Asia, and offshore renminbi is now our third largest currency by volume.”

Torrey Joins Digital Currency Firm Genesis

Dan Torrey has joined OTC digital currency trading firm, Genesis Global Trading, in New York as head of institutional sales. He reports directly to Michael Moro, CEO.Torrey was most recently at Northern Trust, which he joined in mid-2016 as global head of FX e-commerce sales. Prior to that, he was briefly with ParFX, where he was head of FX sales for North America.The bulk of Torrey’s career was spent at EBS, where he spent 11 years in a variety of sales roles, culminating in his appointment as head of sales for the Americas.