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FXSpotStream: A Model That Works Throughout 2018 FXSpotStream experienced a very sizable increase in trading volumes, even though it made no trading product launches on its service last year. Yes, in 2017 it added NDF/NDS products to its trading suite, and yes, in percentage terms it saw a healthy increase in trading volumes in this segment, but this still only accounts for less than 1% of the overall volume on the service. Instead, FXSpotStream’s CEO, Alan Schwarz, attributes the uptick in trading volumes to a significant increase in business from existing clients and volumes coming on line from new clients in the pipeline. At the same time, a broader shift in the market towards disclosed trading is contributing to FXSpotStream’s volume growth as is the firm’s fee structure, which sees liquidity provider banks pay a flat monthly fee to trade on the service while liquidity takers are not charged at all.
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.
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.
FastMatch Settles with Galinov FastMatch and Dmitri Galinov, the founder and former CEO of the company, have resolved the lawsuit filed by Galinov against FastMatch and its parent company, Euronext US.Under the terms of the settlement, neither party admits any liability or wrongdoing.“The settlement is in the best interests of the company, its employees and clients,” says a release announcing the agreement.Galinov left the company on 6 June, 2018 and is “pursuing other interests”, according to the release.Profit & Loss was unable to immediately contact a spokesperson for Euronext, while a spokesperson for Galinov says that as part of the settlement agreement both parties are unable to comment on the terms of the agreement.
FX Connect Announces Technology Upgrades FX Connect has announced a range of technology enhancements, including to its GUI, automated order routers (AOR) and order blotter.“In today’s highly competitive environment where firms face increased complexity and regulatory requirements, it’s vital that we work with our clients to shape our product and solution strategy,” says Beverley Doherty, global head of FX Connect. “Our new enhancements will be instrumental in helping us accomplish this goal, demonstrating FX Connect’s ability to innovate and improve products that create solutions for our clients’ evolving needs.”Making changes via HTML5, FX Connect is creating a trading “cockpit” within its GUI that provides order management and execution through a single, secure interface.Changes to the order blotter include live indicative rates, the estimated percentage away from an order’s limit price, colour coding of orders based on their per cent away from their custom threshold settings and customisable order alters.
FX Volumes on SEFs Up In January The average daily volume (ADV) of spot FX traded on Swap Execution Facilities (SEFs) in January was $61.2 billion, up month-on-month from $49.8 billion and up 5.5% from $58 billion in January 2018.This represents the third highest month of ADV ever, behind June and March 2018, when the platforms registered a total of $62.9 billion and $61.3 billion, respectively. Tullett Prebon’s SEF saw the most FX volume, with an ADV of $15.8 billion going through its platform last month. The next biggest by volume was the BGC SEF, which recorded an ADV of $12.4 billion in FX, followed by Tradition and GFI, which both recorded $9.4 billion.
Refinitiv, CLS Volume Increase Driven by FX Swaps The total average daily volume (ADV) of FX trading across Refinitiv platforms in January 2019 totaled $446 billion. This total, which reflects trading volumes on Refinitiv Matching and FXall in all transaction types, including spot, forwards, swaps, options and non-deliverable forwards (NDFs), represents a 3.2% year-on-year increase and a 12.6% month-on-month increase. The ADV of spot trading on the Refinitv platforms was $95 billion, actually a 12% decrease compared to January 2018 and a 5.5% increase compared to the previous months. But in non-spot products the ADV was $351 billion, up 8.3% and 15.5% year-on-year and month-on-month, respectively.
CME, EBS Volumes Decline in January Although EBS volumes rose month-on-month, average daily volume data for CME Group weakened in January from the year before. CME’s FX futures and options product set had ADV of 838,000 contracts per day, which Profit & Loss estimates represents $83 billion per day, a 23.5% fall from January 2018. This is also a 15.3% drop from December’s estimate of $98 billion per day in notional value. Meanwhile, EBS, which is now owned by CME, reports spot FX volume of $87.1 billion in January, 14% higher than December, but 17% down on a year-on-year basis. This also represents the worst January for the platform since it started reporting ADV in January 2007.
Mixed Results from FX Platforms to Kick Off 2019 While the results from the first three platforms to report FX turnover data are all up from December, the year-on-year comparison is more mixed, with FXSpotStream hitting another peak for the service, but CboeFX and FastmatchFX both falling back. FXSpotStream reports average daily volume (ADV) of $38.4 billion in all FX products, while CboeFX handled $36 billion per day of spot and FastmatchFX saw a daily average of $20 billion transacted on its platform. The Fastmatch Tape saw a decline for the second month in a row, however.
FXall Rolls Out Trade Analytics Tool Refinitiv has formally launched Trade Performance Analytics (TPA), the new analytics solution for users of FXall. “TPA empowers users to assess the quality of their historical execution, conduct like-for-like comparisons of liquidity providers, as well as make better informed trade planning decisions. Leveraging highly interactive data visualisation technology, this comprehensive analytics solution offers several analytics views that are available for immediate use, with the ability for users to customise their analysis using a wide range of filters,” says Refinitiv in a release announcing the launch today.