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Exchanges & Clearing

FastMatch Generates €7.2m Revenue for Euronext FastMatch has generated €7.2 million in revenues for Euronext since the exchange operator acquired 90% of the OTC FX platform in August 2017, according to its full-year 2017 results. As part of that deal, $46.7 million was paid to FXCM on closing for its stake in FastMatch, with $8.7 million held in escrow subject to certain potential future adjustments. In addition, it was agreed that FXCM would receive share of a $10 million earnout if certain performance targets of FastMatch are met, although these targets have not been disclosed.
Thomson Reuters Cites MTF Launch with Record FX Volume Report Average daily volumes (ADV) across TR’s FX platforms totaled $432.1 billion in January 2018, with ADV for spot trading at $107.9 billion. This total reflects trading volumes on Thomson Reuters Matching and FXall in all transaction types, including spot, forwards, swaps, options and non-deliverable forwards (NDFs). “Following preparation for and then implementation of one of the most complex regulatory initiatives in a generation, our success over the last month reflects the value we place in listening to our clients and ensuring our solutions meet their MiFID II needs,” says Neill Penney, co-head of trading. “As the market evolves, we are committed to making additional enhancements across our trading businesses, including enriched analytics and algo trading capabilities.”
SGX Sees Record Volume in USD/CNH Futures Singapore Exchange (SGX) set a new volume and open interest records for its USD/CNH futures contract in January. A total of 297,011 USD/CNH futures contracts with a notional value of  $29 billion traded on SGX’s platform last month. This represents an increase of 175% y-o-y and comes after the exchange reported full-year growth in trading on the contract of 270% in 2017 compared to the previous year. Meanwhile, the daily open interest for this product reached a new high of 31,278 contracts, with a notional value of $ 3.21 billion, on 26 January.
LMAX Consolidates Ownership with £21.9m Buyout LMAX Exchange has completed an equity purchase of Paddy Power Betfair’s remaining stake in the business. The 31.35% stake (or 187,811 shares), bought for £21,945,000, brings 95% of the company under the control of the group’s management. The equity purchase is financed by a senior debt facility provided by Silicon Valley Bank (SVB), a bank focused solely on the innovation economy. The terms of the loan are not disclosed. David Mercer, CEO of Lmax. comments: “I am very pleased to be working with Silicon Valley Bank. SVB’s focus on the innovation economy resonates perfectly with Lmax Exchange growth story and future ambition – this creates a solid foundation for our partnership going forward. Having successfully built a global exchange marketplace for FX, our ambition is to continue growing our distribution and propagate the exchange execution model across capital markets.”
FIA Data Highlights Stagnant FX Futures Volumes New data from the Futures Industry Association (FIA) highlights the lack of significant growth in the volume of FX futures trading over the past several years. According to the FIA data, 2.1 billion currency futures contracts were traded in 2017, and while this represents a 302% increase from the 2008 volumes – which is as far back as the FIA data provided goes – this hardly tells the whole story. The data shows that between 2009 and 2010 the volume of FX futures traded jumped 160%, from 950 million contracts to almost 2.5 billion. What drove this sudden spike in trading volumes?
FCMs Begin NDF Clearing for Clients at CME CME Group announces that three of the larger FCMs in the market – Citi, Credit Suisse and Morgan Stanley – have started to clear NDFs for their clients at CME. This follows on from the announcement from the exchange in late 2017, that seven market participants had agreed to clear NDFs, including three of the top four emerging markets FX liquidity providers, according to the Euromoney survey. CME claims in a release issued today that its strength in the interest rate swaps (IRS) markets in LatAm and APAC make it “the natural home for participants to clear FX NDFs”.
First CBOE Bitcoin Futures Reaches Settlement Cboe Global Markets (Cboe) announced the settlement of January expiry Cboe bitcoin (XBT) futures. The settlement price was $10,900.00, as determined by the 4:00 p.m. ET Gemini1 Exchange bitcoin auction. Cboe XBT futures, launched on December 10, 2017, and a total of over 124,000 contracts have traded across expiries since, representing a notional value of over $1.5 billion. The contracts, which are cash-settled, were specifically designed to allow participants to implement straightforward trading strategies through settlement to a single, tradable auction price as calculated by Gemini.
LCH Reports Record Year as FX Stands Out Clearing house LCH has announced record volumes across multiple clearing services in 2017, with FX leading the way by registering the greatest pace of growth across established products. The firm says its equities, fixed income, and OTC derivatives clearing services all surpassed previous years’ clearing activity, with growth driven by the roll-out of new products, effects of regulatory change and the onboarding of new customers across the world. LCH’s FX derivatives clearing service, ForexClear, delivered very strong growth in 2017.
Year-End Volumes Showing MoM Dip Thomson Reuters and Singapore Exchange have today released year-end FX trading volumes, which each show year-end dips from the previous month. TR reports total average daily volume of foreign exchange trading across its platforms in December totalled $392 billion, a dip from the $397 billion reported in November. Average daily volume for spot trading was $88 billion, down from $94 billion in November. This total reflects trading volumes on TR’s Matching and FXall in all transaction types, including spot, forwards, swaps, options and non-deliverable forwards.
Clearing Houses Granted MiFID Waiver UK and European regulators have granted clearinghouses exemptions from the requirement to provide their customers with more choice over where their trades are cleared. Under MiFID II, which went into effect this week, an open access rule means trades no longer have to be cleared through the same exchange group that handled the execution. The regulation says a European Union central counterparty or trading venue may apply to its local authority for a transitional arrangement in relation to exchange-traded derivatives, under which the open access requirements of MiFIR would not apply until July 2020.