Capitolis has announced that Citi and HSBC are the first FX prime brokers to go live on its novation service.The two banks were live in December 2018 and contributed to bringing the service to market alongside Capitolis. The service, called Capitolis Novation, is a technology platform that automates manual workflows in both FX prime broking and bilateral trading, working collaboratively to provide capital efficiencies for the FX market. The service aims to help reduce overall balance sheet notional and risk exposures that banks currently employ to meet their regulatory capital requirements.
Following an initial positive run in the first few days of the year, all CTAs in the Societe Generale (SG) Indices were in negative territory by the end of January. The SG Trend Index was down 3.25% and the SG Short-Term Traders Index was down 1.71%. The SG CTA Index returned -1.99% despite being helped slightly by three non-trend following managers' positive performances during the month.The SG Trend Indicator attributed losses to equity markets and currencies. They were positioned short in risk assets, hence equity markets' reversal and gains in one of their best Januarys ever, contributed to losses of 3.91% at the portfolio level.
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.
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.
Avelacom, a provider of global connectivity and IT infrastructure for financial services, has opened its third point of presence (PoP) in Tokyo. The new PoP is at the AT TOKYO data centre.In the past year Avelacom says that it has seen double-digit growth in new business volumes originating in the APAC region, driven by clients seeking connectivity services between APAC venues and exchanges, as well as to those in Europe and the USA. The firm says that the decision to add the new PoP stems from market makers, prop-trading firms, and investment bank trading desks that have both local and global interests. "Our clients keep asking us to expand our presence in Tokyo, as they desire
The Bank of England and European Securities and Markets Authority (ESMA) have announced that they have agreed Memoranda of Understanding (MoUs) regarding cooperation and information-sharing arrangements with respect to central counterparties (CCPs) and central securities depositories (CSDs).
The MoUs follow the adoption by the European Commission in December 2018 of temporary equivalence decisions on the future UK legal and supervisory framework for UK CCPs and CSDs.
The Commission’s implementing acts would come into effect in the result of a no-deal Brexit. In that scenario, they would allow UK CCPs and CSDs to be recognised by ESMA from 30 March 2019, and therefore continue to provide services respectively to EU clearing members, trading venues and also provide notary and settlement services for securities issued under EU law.
The MoUs will also only take effect in the event of a no-deal Brexit.
Digital exchange group Kraken has announced the acquisition of Crypto Facilities, a regulated cryptocurrency trading platform and index provider.
London-based Crypto Facilities offers individuals and institutions trading on a range of cryptocurrency derivatives and was the first regulated entity to list futures on bitcoin, ethereum, ripple XRP, litecoin and bitcoin cash. The firm also provides a cryptocurrency index, calculating the CME CF Bitcoin Reference Rate that powers the CME Group’s Bitcoin futures. Eligible Kraken clients will gain access to futures on six cryptocurrency pairs.
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.
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.
Alpine Macro, an independent investment strategy research firm, has hired Harvinder Kalirai as a partner and chief fixed income and currency strategist.In this role, Kalirai will head Alpine Macro’s fixed income and currency research, and will spearhead its next product on fixed income and currencies, due to be launched later this year.Kalirai most recently worked with BCA Research, where he oversaw the firm’s FX strategy service from 2008 to 2016, and the BCA Daily Insights service from 2016 to 2018. Prior to BCA, he was head of currency management at CIBC Global Asset Management.