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Best Structured Products Platform P&L Report Card Structured products have become mainstream with the explosion in service providers offering second generation derivatives and other yield enhancing products. Most banks now offer a reasonable range of structured products and more and more are building out the ability to create your own basket. Mainly it has to be said, we are seeing this in the FX space – we are primarily a currency and derivatives magazine after all – but there are also some looking more closely at multi-asset structured notes.
Best FX Prime Brokerage P&L Report Card There are signs – and we should be whispering it – that the prime brokerage space is waking up again. Partly we suspect this could be because some prime-of-primes are revitalising the major providers (it could also be they are getting too good for the majors’ liking and the latter needs to spend more on keeping clients) and partly it is because they are done cutting the client tail and are now content to focus on better functionality for those remaining clients.
Best Research Platform P&L Report Card If there appears to be one area where MiFID II has been something of a fizzer it is research – or at least in FX terms it is. Few, if any, banks were concerned or had seen a huge impact on their output, generally speaking if required a client could be put behind a virtual paywall, or not permissioned for certain content. Others are happy to absorb the cost of research, meaning that for many clients not a lot has changed and for the banks, few have dramatically changed their business model.
Best Order Management P&L Report Card Although the algo is taking on more importance in terms of order management, the relatively slow take up, allied to more short term bursts of volatility, means that customers are refocusing their attention on basic order management. The trust issues that drove a wedge between some clients and the banking industry appear to be on the way to being, if not totally, solved, not least thanks to sometimes draconian oversight at the banks. Thus an old friend, the order, is making a comeback. Of course, if we were to be cynical we would say it is doing so because leaving an “at best” order neatly shifts the best execution emphasis back onto the bank!
Algo Provider of the Year P&L Report Card T his has become a very competitive field over the past couple of years and is showing little or no sign of slowing down, for just about every major FX bank has a suite of algo execution tools available for clients. Achieving higher adoption rates remains something of a problem, however it is noticeable that the advent of third party mechanisms to analyse execution quality does appear to be giving clients some confidence in using algos – this is important if the impressive budget outlay is to be rewarded.
2018 Post-Trade Award P&L Report Card Well we’ve mentioned MiFID II enough in this feature so it’s time to focus on the area that bore a lot of the reporting brunt, for post-trade is very much about the box ticking, the checks and balances that permeate the regulation. We continue to see a drift towards a more utilitarian approach in post-trade – as we noted last year, the more focused the rules get, the less room for manoeuvre there is, therefore collaboration is probably the way forward.
Best Traders Platform P&L Report Card This award has historically been about information and interaction – providing traders with the right information in an easy to read format, preferably on the same desktop (or mobile device) as their pricing. Traders have always relied upon analytics because their decision making process has to be as informed as it can be if they are to succeed, especially in today’s event-driven markets. This means a clean dealing tile – the origins of this award – remains important for GUI traders, and we would highlight that GUI traders typically offer better value to a provider bank than a fully automated client. It equally means interactive execution tools, backed up by great analytics.
Best Leveraged Sector Platform P&L Report Card We have noted in these pages before how the hedge fund industry – with its myriad models – has been at the centre of the banks’ move to cut the client tail. For those funds that do not see FX as a source of direct Alpha – they still want to make money off their FX trading if they can of course – there has not been much difference. For those global macro players, who are having such a rollercoaster existence, however, the story, is different.
Best Real Money Platform P&L Report Card Thanks to everyone’s obsession with MiFID II, the asset manager space is another where we have not seen a tremendous amount of movement in the past 12 months. Yes, there is a greater focus on execution quality and more managers have discovered the words “market” and “impact”, but overall what we are seeing is the continuation of a trend that started in 2016. Executions desks are under as much pressure, if not more, than their service providers, which means they are searching for the tools and services that can help them deliver those vital extra basis points in performance.
Best Corporate Platform P&L Report Card It’s all very well focusing on the large corporates who we all know, but this space is so much more diverse than that – and in terms of value, many bankers will tell you in an unguarded moment, that the real value lies further down the food chain. Most multi-nationals have very sophisticated technology and often execution desks, but when you go further down the chain more often than not the FX hedging is handled as part of its daily tasks by the accounting function and people with only a passing knowledge of the infrastructure and nuances of the market.