A couple of months ago I wrote a piece highlighting what I suggested was the first signal of a real shift away from anonymous trading toward disclosed. The column received, as is usual I should point out, a mixed response, with several of you pointing out that without the anonymous pools of liquidity price discovery would be severely hampered and liquidity would dry up. Back then, I used FX Committee data for the basis of my argument, but now it looks as though the platforms are providing the ammunition.
Tag: Nex Markets
NEX Markets has announced that BrokerTec Europe has worked with Eurex Clearing to launch a new clearing solution for the European repo market.
The new clearing solution will be live by the end of 2018 and will allow existing BrokerTec clients to select to clear their repo transactions via Eurex Clearing. “This solution will allow market participants to consolidate their European repo and corresponding OTC and listed derivatives business under the single risk framework of Eurex Clearing, via the BrokerTec platform,” the firms say.
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.”
FX liquidity providers that use technology and data analytical tools are becoming more powerful in FX markets, but liquidity consumers are becoming better informed.
The role of data and the empowerment it brings FX market participants was a key theme of the first panel looking at liquidity at Profit & Loss Forex Network Chicago. Panellists agreed that generally speaking, liquidity in FX markets is fine, there is always a price; however, the question liquidity consumers need to ask is: “How high is that price?”
Profit & Loss understands that Laurence Timmons, head of sales for Asia Pacific at NEX Markets in Hong Kong, is returning to London. It is unclear if he is remaining with NEX and if so, to what role he will be appointed.
Serge Marston, regional head of sales for EMEA at NEX Markets, is believed to be taking on additional responsibility for Asia Pacific and while he will continue to be based in London, sources familiar with the matter say he will spend “significant” time in Asia Pacific.
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%.
NEX Markets has taken a small but important step to embedding the FX Global Code further into its business by allowing liquidity providers and liquidity consumers who have registered their Statements of Commitment (SoC) to the FX Global Code to identify themselves.
Hugh Whelan, global head of liquidity management at NEX Markets, says the move will help clients identify which of their counterparties on EBS Direct and EBS Select, have signed and registered an SoC on the NEX Global Code Register. “The FX Global Code is an important piece of work that will help build transparency levels in the industry further,” he says
The second group of venues to report data indicate a similar pattern to the first, with NEX Markets and CME Group up month-on-month and Integral down – all were up on a year-on-year basis.
NEX Markets says average daily volume (ADV) in spot FX was $84.7 billion, up 3.4% from July and up 2% from August 2017. CME Group says it handled an average of 813,113 contracts in its FX futures and 69,803 in its FX options product set. Profit & Loss estimates this to represent around $87.4 billion in total notional value.
Integral Development, meanwhile, reports ADV in all FX products, spot, forwards and swaps, to be $33.5 billion.
NEX Markets has released a new report, which it says demonstrates greater transparency and improved behaviour in the FX market since the FX Global Code came into effect in May 2017.
The report, entitled The FX Global Code: Changing Transparency and Behaviour, uses data from NEX Quant Analytics and highlights how the firm has witnessed a significant reduction in hold times, reject rates and a tightening of spreads on the bilateral EBS Direct platform. “This suggests an industry-wide move for greater transparency and improved market behaviour,” the firm says.
What’s in a name? It’s a question that is asked in all walks of life almost on a daily basis and the last week or so has seen it asked in financial markets as Thomson Reuters Financial & Risk Division prepares for life as Refinitiv. I must confess that on reflection I don’t have that much of a problem with the name itself, but the rebranding opens the window on a period of vulnerability for the renamed business as competitors eye one of its prized assets.