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EBS Volumes Down YoY in June, but up MoM on Brexit

Icap’s EBS average daily volumes (ADV) were down 3% year-on-year
in June, standing at $97.4 billion, the firm reports. However, volumes were up
sharply on a month-on-month basis in June, rising by 29% compared to May.

The movement was partially driven by the Brexit referendum,
with G3 average daily volumes increasing by “over 100% in the week following
Brexit” ICAP says, adding that “volatility was driven by news and uncertainty
on the impact to the UK, and the rest of Europe was speculated upon.”

Overall, G3 currencies – dollar, yen and euro – ADV rose by
43% month-on-month in June.

Meanwhile, non-deliverable forwards (NDF) volume gained 12%
in June, both “during the run-up and as response to the EU referendum”, ICAP
explains.

Furthermore, China’s CNH – the offshore convertible
currency – ADV in June rose 18% month-on-month.

“The number of counterparties trading on a daily basis
further rose from May to reach a second, consecutive record month” Icap says.

“In response to the EU Referendum, average daily volumes
jumped 75% as increasing USD strength led to notable depreciation in CNH
through the final week of June,” it adds.

Meanwhile, ADV for the 12 months ending June 30, 2016 fell by
15% year on year, standing at $89.5 billion.

beatrice@profit-loss.com

Twitter@Profit_and_Loss

Beatrice Bedeschi

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