In this week’s podcast, P&L managing editor Colin Lambert takes a look at the week’s news, including a brief look at the month-end Fix and the “Friday phenomena” in liquidity, leading him to describe the overall experience as “not a good look for the market – although he does also ask the question, “has much changed since 2010?”.
He then moves on an incident that he sees as being an egregious breach of the principles of the FX Global Code in the triggering of a barrier option and is concerned that while it is in the public interest that people know about it, the matter-of-fact nature of the report indicates an overly-casual attitude to the Code. So, does this indicate that as well as continue to focus on specific nuances in the Code, we need to reiterate the basic principles to participants?
Lambert also notes the launch by Refinitiv of an API for its Matching for Forwards and tentatively (he does have some “previous” on predicting this) sees FX swaps market structure as one of the key themes in the next 18 months.
Another launch last week was CME Group’s FX Swap Rate Monitor, so Lambert talks to Paul Houston, global head of listed FX products at CME Group about the new product, what it does and the benefits to traders.
They then move on to discuss CME’s FX Link, a key component in the exchange group’s FX suite of products, including the rate of adoption, the diversification and regulatory benefits – especially around capital and G-SIB issues – before looking at the challenges of building out what is still a relatively nascent product and it’s place in the overall FX swaps market structure.