A new report from Greenwich Associates argues that the incoming Uncleared Margin Rules (UMR) will fundamentally change the economics of OTC FX options trading to a point where buy side firms will increasingly trade these products on listed exchanges. “Historically, most FX options trading was done over the counter, but UMR has the potential to […]
Tag: CME Group
CME Group has appointed new heads to the EBS, BrokerTec and Optimisation business lines as part of its ongoing integration with NEX Group, which the exchange acquired last year. Jeff Ward has been named global head of EBS, having formerly served as global head of NDFs and forwards and head of EBS Asia, based in […]
Three senior executives at EBS are to leave the company as part of the previously announced plan to streamline the combined CME/EBS business following the exchange group’s takeover of certain assets of NEX Group last year. Informed sources confirm that Jim Iorio, global head of FX sales at EBS will leave the firm in the […]
Data from CME Group, Integral Development and Refinitiv, which reports a new high in average daily volume (ADV), confirms the picture established by three other platforms earlier this week of a rebound in March FX volumes.
CME Group says its FX futures and options franchise handled 1,042,000 contracts per day in March, which Profit & Loss estimates to be just over $103 billion in notional volume. This is a 36% increase on activity in February, but is 7% down year-on-year, it is also CME’s busiest month in FX since September 2018.
March 25 marks the one year anniversary of the launch of CME’s FX Link, probably the most significant attempt by a market intermediary to establish a bridge between OTC and futures markets. In terms of volumes, as expected the growth has been steady rather than spectacular, although FX Link did hit a new record high on March 7 at just under $2.7 billion notional. Generally speaking the platform is handling average daily volumes in the region of $1-1.5 billion in 2019.
The three primary FX venues to report average daily volume (ADV) data have reinforced data from a second group that activity in the market was low in February.
Refinitv says it handled $87 billion in spot ADV in February, down 8.4% from January and down 23% from February 2018, while CME Group says both its futures and EBS businesses saw similar declines.
CME Group reports ADV in futures and options contracts of 762,000, which Profit & Loss estimates to be notional volume of $75.4 billion. This is a 9.2% drop month-on-month but down 30% year-on-year.
The first batch of FX platforms to report data indicate October saw a modest uptick in activity from September, although CME Group saw average daily volume (ADV) fall from an outstanding previous month.
The stand-out results come from FXSpotStream, which has reported another peak in activity at $35.9 billion per day. Not only does this represent a 12.5% increase from the previous record in September and a huge 80.1% increase year-on-year, it also means that FXSS is recording ADV very close to CboeFX, formerly HotspotFX.
CME Group says it has completed its first initial margin optimisation cycle in collaboration with Quantile Technologies, which generated over $1.2 billion in NDF clearing across multiple currency pairs from banks including Citi and Standard Chartered.
CME announced its NDF service in late 2017 and started clearing at the start of this year with three futures commission merchants (FCMs), Citi, Credit Suisse and Morgan Stanley.
With the ongoing implementation of the uncleared margin rules across both sell-side and buy-side firms, CME has been focused on delivering the greatest capital and margin efficiencies for our global clients, the exchange group says.
The boards of CME Group and NEX Group have announced they have received clearance under the Hart-Scott-Rodino Act from the United States Department of Justice – Antitrust Division for the proposed acquisition of NEX by CME and Bidco – an important step in the process to complete the acquisition..
CME and NEX have also received the relevant regulatory approvals from the UK’s Financial Conduct Authority (FCA) and regulators in the US, Germany, Italy and Sweden, and have made the requisite pre-notifications in Hong Kong.
CME Group has reported the second busiest month for its FX contracts since September 2014. The exchange group reports that it handled 1.132 million contracts on a daily basis in September, a massive 28.2% increase on August. Profit & Loss estimates this to represent a notional value of $112 billion per day.
Year-on-year, activity is actually 15.4% lower at the Merc, with the previous September registering 1.23 million contracts.
Elsewhere, NEX Markets says it handled average daily volume of $86.1 billion, up 1.6% from August, but also down from the previous September, by 11.6%.