Tag: Asia

Asia

Flash Crash or the New Norm? Deciphering January 3

The foreign exchange industry got an early reminder of risk when on the second full day of trading this year the market saw another flash event. What, if anything, does this mean for FX market liquidity and volatility in the year ahead though? Colin Lambert finds out.The very sharp moves seen in FX markets at the start of the year triggered yet another round of introspection over conditions in the FX market with commentators pointing the finger of blame at one or more of algos, news from Apple, thin markets, Japanese retail and poor execution. Although Profit & Loss understands that industry players have been approached for data logs by certain regulators, the chances of an investigation turning up a convincing catalyst for the moves are thin.

Flash Crash or the New Norm? Deciphering January 3

The foreign exchange industry got an early reminder of risk when on the second full day of trading this year the market saw another flash event. What, if anything, does this mean for FX market liquidity and volatility in the year ahead though? Colin Lambert finds out.The very sharp moves seen in FX markets at the start of the year triggered yet another round of introspection over conditions in the FX market with commentators pointing the finger of blame at one or more of algos, news from Apple, thin markets, Japanese retail and poor execution. Although Profit & Loss understands that industry players have been approached for data logs by certain regulators, the chances of an investigation turning up a convincing catalyst for the moves are thin.

In the FICC of It

It may be his life-threatening illness (slight cold) but Colin Lambert is in punchy form in this week’s In the FICC of It podcast, so listen in as he and Galen Stops discuss a busy week in the FICC world.
Starting with the potential implications of Cboe’s agreement with UBS to help broaden the reach of its FX platform – and why Refinitiv might want to sit up and pay attention – they rampage through the multi-dealer platform world looking at how (if according to Lambert) platforms can differentiate themselves. Are these firms really taking the single dealer model and deploying it in a multi-dealer landscape? Will this work? What are the USPs of a single and multi-dealer platform?

Eastern Promise: Asia as a Crypto Hub

How have crypto markets in Asia evolved in comparison to those in the US and Europe? And will these markets look more or less different in the future? Galen Stops takes a look.

T aking a glance at the biggest crypto exchanges by volume and a clear pattern emerges: according to data from coinmarketcap.com, a website that tracks crypto trading volumes, at least seven of the top 10 ranked exchanges are based in the APAC region.

By contrast, some of the more better known US-based exchanges are found much further down the list.

FX in Asia: A Question of Risk and Reward

The potential for Asian FX markets has long been talked about but has rarely been delivered, that may be changing, however, as Colin Lambert finds out.

When, in the early morning of October 7, 2016, the FX market witnessed a flash crash in Cable, there was a collective metaphorical shrugging of the shoulders, as epitomised by one London-based trader who told Profit & Loss, “It’s Asia – that type of thing happens.”

The perception is that institutions pay less attention to Asia, allocate fewer resources to the region generally and, as one global head of FX puts it, “Rely upon Asia not to drop the ball.”

NDFs – The New Model Market?

Volumes in NDF markets have increased dramatically in recent years, but what is behind this accelerated activity and will it continue? More importantly, what role are the lessons learned from the G10 markets playing? Colin Lambert finds out.

The biggest growth story in foreign exchange over the past two years since the Bank for International Settlements’ 2016 Triennial Survey of FX Turnover has largely taken place in the shadows, for while spot volumes have largely plateaued, activity in the non-deliverable forward segment has grown exponentially. NDF average daily volumes, as reported by the UK and US foreign exchange committees, is 50% in the two years from April 2016 – a pace of growth no other product can match.

SGX Launches “Futurised” OTC FX Product

Singapore Exchange (SGX), is launching a new product, SGX FlexC FX Futures, with the aim of “futurising” certain OTC FX product offerings.

Targeted for launch on August 27, SGX FlexC FX Futures – developed in consultation with market participants – enable bilateral trades that are privately negotiated with tailored expiration dates to be registered and cleared like a standard SGX FX futures contract. This feature will be available for INR/USD, KRW/USD, TWD/USD, USD/CNH and USD/SGD contracts.

Michael Syn, head of derivatives at SGX, says: “Access to counterparty credit, especially for tenors longer than spot, is increasingly scarce and expensive in the OTC FX markets.

Profit & Loss Talk Series with Raj Sitlani

Raj Sitlani, co-founder of IS Prime and managing director of ISAM Capital Markets, sat down with Profit & Loss in Shanghai to talk about the challenges associated with expanding into Asian FX markets and why technology remains the key differentiator for prime-of-primes.

Profit & Loss: So what’s your business focus in Asia?

Raj Sitlani: We have a large market share in Australia but, until recently, never truly had the manpower or the resources to crack the broader Asia market. However, there’s a very big opportunity in the region for us to provide our flagship product – which is a prime-of-prime service with aggregated FX liquidity – and so last year we set up a Hong Kong office through which we can build out our presence in North Asia and China.

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.

Sustaining the Momentum

Since launching its initial suite of FX products four years ago, SGX has reported consistent growth in this business segment. But can the exchange sustain the momentum going forward? Reporting from Asia, Galen Stops takes a look.

Back in November 2013, Singapore Exchange (SGX) went live with trading for six deliverable and non-deliverable currency pairs: AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY. As Profit & Loss noted at the time, the aim was clearly to establish SGX as the major hub for Asian currency futures trading.

Fast forward four years and it appears that the exchange is well on its way to achieving this ambition, with the star performers in its FX suite being the INR/USD and USD/CNH contracts, the latter of which was launched in 2014.