Within the UK’s FX Joint Standing Committee (JSC) report on FX turnover, the data on execution styles suggests a return to trend on the part of the channels through which participants are trading. The last two reports from the UK have been notable for a significant surge in spot business executed via the voice channel, […]
Tag: FX committee surveys
FX committee surveys
There are those in the FX world who believe the narrative of a return to bilateral, relationship-based trading was driven by a group of liquidity providers talking their book. Looking at the numbers in last week’s FX committee turnover surveys, specifically the spot e-trading statistics from the UK and US, I think it is fair to say that the cynicism is wrong, or the narrative is working, or both, because the last two years has seen a definitive shift in trading away from anonymous venues towards disclosed channels.
Data from the UK’s FX Joint Standing Committee (JSC) shows that while overall volumes dropped, e-ratios in spot and across the broader market both rose from April. Meanwhile in the US survey spot e-ratios dipped slightly, as they did across all FX products.
The JSC survey suggests the UK market had a spot e-ratio of 62.2%, the highest registered since the October 2012 survey. This is a significant increase on the 57.9% highlighted in the April 2016 survey and the 54.5% ratio in October 2015.
Data from the world’s FX committees reinforces the sense that April was a minor outlier in FX turnover, with all but one centre reporting a slowdown in activity from April 2016 to October 2016.
In April 2016 – coincidentally the month of the Bank for International Settlements’ (BIS) Triennial Survey of FX Turnover – there was a late spike in activity as the Bank of Japan surprised markets through its inactivity on monetary policy, leading to yen volumes soaring. This spike has largely been reversed in the latest surveys.