Tag: FX market structure

FX market structure

In the FICC of It

With the disclaimer that one only has a degree in English Literature (the other keeps his 5 O levels quiet) Colin Lambert and Galen Stops ignore their lack of expertise and dive back into the legal world in this week’s podcast as they look at the big issues in the FICC world. Stops explains the […]

And Another Thing…

It’s been quite a week for me thanks to my digital life being turned upside down (I have never had to deal with so many help desks at one time) and the passing of the founder of my favourite restaurants in London, Dick Barfoot of Sweetings. So with a “vale” to Dick and a gesture […]

And Finally…

I quite like reading academic papers on the FX market structure – often they state the obvious, but just as often they get the hamster back on the wheel in my head.
An interesting paper on spoofing and pinging in OTC FX markets was released recently, which does a great job of highlighting why platforms need to be on top of behaviour; how some LPs are nothing of the sort and how others’ behaviour could be confused with spoofing but shouldn’t be. The paper also provides support for my argument that Mark Johnson’s conviction should be over-turned.

Changing Market Structure a Challenge to Central Banks’ Monitoring of FX Markets: BIS

The Bank for International Settlements’ Markets Committee has released a report by a recently-formed study group, which looks at the evolution of what it terms fast-paced electronic markets, focusing mainly on spot FX, and the challenges this evolution has for central banks.
The report says the market structure changes have implications for central banks’ approaches to market monitoring, including the range of participants with which they engage, the types of data they collect, and the tools and technologies they utilise.

And Another Thing…

This won’t take long as it’s a long weekend for most in the markets, including me! Just to reminder subscribers that we will have the latest in our monthly Insight calls next Wednesday – I thought we’d give you an extra day to get things back in order – and there is plenty to talk about.
I’ve already had a couple of messages about the events of the past month, possible bids for NEX, unfair dismissal claims being won and the Cartel traders making their first appearance in court, so we can discuss all of that if we have time, plus there is something I want to get into regarding the FX market structure.
So, it will be great to have you join us – this is only open to subscribers – and I look forward to a nice long weekend preparing some ammunition for Wednesday!

LMAX Exchange Partners with Academia

LMAX Exchange has unveiled a partnership with an academic at the University of Oxford to develop a methodology for consistent evaluation of trading costs across liquidity pools that can be used by the FX industry.
Dr. Álvaro Cartea of the University of Oxford’s Mathematical Institute is a leading researcher and published finance expert specialising in high-frequency and algorithmic trading, market quality and financial regulation. Together, LMAX and Dr. Cartea aim to drive forward the industry’s understanding of FX TCA and produce mathematically robust findings of practical value to benefit all FX market participants, the firm says in a statement.

And Finally…

There is a chance later this week that we will know the decision of the GFXC feedback process on the possible rewording of Principle 17 , so I won’t go into the arguments put forward by Norges Bank Investment Management over last look in any detail. Instead I want to look at its observations around the use of algos and price verification and then to add to my growing list of foes in the analytical/academic space by pointing out why they are wrong!

And Finally…

For years now certain interests have been trying to impose an equity market structure on FX – look at MiFID II – and the reason it hasn’t happened is simple. That structure is inferior to the one that already exists in FX. It may suit equities – I’m not sure it does – but it doesn’t suit FX. It’s 30 years since the “Crash of ’87” which first highlighted the issue to me, and, three decades on, I don’t think much has changed.

Creating a New Playbook: Forex Network to Address FX Market Vulnerabilities

A number of geopolitical events – Brexit and the US presidential elections to name but a few – have led to ongoing currency volatility. What has the FX market learned about how the modern market functions in times of high volatility and which lessons can be applied to smooth trading during unexpected news events going […]