And Another Thing…

Here are three statements. “Fragmentation exacerbates the already inherent challenge – adequate liquidity – and increases market fragility as a result.” “Fragmentation leads to smaller, disconnected liquidity pools and less efficient and more volatile pricing.” “Divided markets are more brittle, with shallower liquidity, posing a risk of failure in times of economic stress or crisis.” […]
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And Finally…

Regular readers will know that I volunteer to help run the ACI Australia Dealing Simulation Course around the world – I actually met a good number of you for the first time at that forum. In the last year the course has been looked at in terms of the FX Global Code and one or two new processes introduced, but last week in Denmark was the first chance I got to put some new ideas into action – and the results highlighted how easy it is to get confused by some aspects of market interaction, and also why the buy side needs to get onside.
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And Finally…

One aspect of the feedback to my midweek column caught my imagination and, possibly thanks to sleep deprivation, made me fear that I have seen the seeds of the next FX scandal being sown. I think the banking industry has a problem with how it judges the performance of voice traders - what worked two decades ago simply doesn't now, and we need it to change before we breed a similar level of desperation to hit targets to those that incubated the chat room scandal.
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And Another Thing…

I have been quite vocal in recent weeks about the need for responsibility in financial markets generally and in particular have expressed the opinion (which has not gone down that well I will confess) that unless there are specific circumstances, for example, a bilateral trade on a private venue where both parties agree it was wrong, we should never consider re-papering trades. It is now time to take a different perspective on this, although I hasten to add I have not changed my mind – “always certain”!
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And Finally…

Regular readers will know that, with a few honourable exceptions, I don't have the highest regard for FX strategists. It comes from bitter personal experience and, if I am honest, the surge in retail (sorry – institutional!) FX brokers seeking to give their clients insight (when all they mostly do is report the news). That said, even I would have to draw the line at FX strategists as market manipulators. According to reports at the weekend, however, this is a line that the Turkish authorities are more than willing to cross.
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And Another Thing…

After a good January, March is shaping up to be, much like February, a pretty ropey month for many in the foreign exchange industry, and this is manifesting itself in the form an increasingly louder debate about the lack of volatility. I saw this week one publication suggesting that FX markets need “a proper crisis” to get things moving, but I am not even convinced that will do it. The sad reality for those seeking livelier markets is that this is probably your new 'normal'.
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And Finally…

In the wake of the GFC and the allegations of misconduct aimed at institutions and individuals, the buzz word was ‘transparency’ – the word from market participants was that they were going to be transparent about everything, meanwhile regulators everywhere made a sustained push for absolute transparency in markets. The thing is, in FX terms especially, it hasn't worked – I am not convinced it has in any market actually – and market participants are showing this in where they put their business.
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And Another Thing…

This column comes with a warning as I am getting increasingly grumpy with attitudes to FX market price action. You clearly can't please everyone, but how can someone complain - as they did to me this week - that what we have seen in sterling this week was "the wrong kind of volatility"? Luckily I have this column to let off steam so let's do that - with a take down of the model that has turned FX traders into glorified brokers.
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Who Are the Potential Buyers of Refinitiv?

n October 2016 Profit & Loss published an article: “Who Are the Potential Buyers of NEX?” This time around, Galen Stops applies the same type of analytical treatment to Refinitiv.In October 2018 a consortium, led by the private equity firm Blackstone, concluded a deal to acquire 55% of the equity in Thomson Reuters Financial & Risk (F&R) business, now rebranded as Refinitiv. No one in the market is under the illusion that Blackstone intends to maintain its ownership of Refinitiv, least of all the staff that work there.
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And Finally…

Over the years the most powerful criticism aimed at e-commerce and its potential impact on markets has not been about volatility, or market behaviour generally, it is its lack of flexibility – why else, for example, has the FX swaps market not become more automated in recent years? This is a genuinely intriguing question and whilst in the past it was hard to see how it could happen - thanks to resistance on bank and broker side - now I am definitely picking up a different vibe.
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