Sterling has had one of its strongest days for several years, climbing almost 3% versus the dollar following the release of an exit poll from the UK general election signalling a large majority for the ruling Conservative Party. Cable jumped to 1.3330 from 1.3170 on the release of the poll, before climbing higher to 1.3510, […]
Market sources say that liquidity in FX markets has held up well following the shock exit poll from the UK general election indicating a much bigger majority for the ruling Conservative Party than expected. Cable jumped from 1.3170 to 1.3350 immediately following the poll, but has since climbed steadily to 1.3500, while EUR/GBP fell from […]
I am flying to Singapore and then Hong Kong for our two Asian conferences this week, so this will necessarily be relatively brief – what does the British electorate have in store for us this time and will this UK general election, like so many other votes recently, leave the pollsters with egg on their […]
Markets might currently be overestimating the amount of Brexit premium left in sterling, argue senior analysts at UBS. “There’s not as much Brexit premium in sterling as people think,” says Arend Kapteyn, global head of economics and strategy at UBS. “A lot of the discussion I have with investors is along the lines of: ‘Sterling […]
It’s been a busy 20 years since Profit & Loss launched. Colin Lambert and Galen Stops have picked out 20 key events or trends during that time and asked senior industry figures for their perspective on them – here’s numbers 10-6. 10. Brexit Putting aside the (ongoing) politics, the night of the Brexit vote showed […]
It’s the past, present and future as far as the agenda for this week’s In the FICC of It podcast is concerned as Colin Lambert and Galen Stops take a look at the chaos in the UK surrounding Brexit, digital assets, and the e-revolution that hit FX 20 years ago. Stops is surprised by the […]
Lizzy Birmingham provides a brief roundup of the major FX moves this week, and the drivers behind each. 1) SNB Upholds Ultra-Loose Policy The Swiss franc was up 0.2% to 1.12127 per euro on Thursday following Swiss National Bank (SNB) president, Thomas Jordan’s, announcement to maintain loose monetary policy. In an interview with Bloomberg, Jordan […]
This column comes with a warning as I am getting increasingly grumpy with attitudes to FX market price action. You clearly can’t please everyone, but how can someone complain – as they did to me this week – that what we have seen in sterling this week was “the wrong kind of volatility”? Luckily I have this column to let off steam so let’s do that – with a take down of the model that has turned FX traders into glorified brokers.
I know I have floated ideas around this issue before, but do we need to do more about that hour after the New York close than just talk about it? Flash events are starting to occur a little too frequently in FX markets for some peoples’ liking, so what can we do about it? Actually I think we can do quite a lot – or at least it would be a lot if all the noise around data capabilities isn’t just that – noise.
A new Staff Working Paper published by the Bank of England supports the assertion made in the original investigation by the Bank for International Settlements’ (BIS) that the October 2016 sterling flash crash may have been exacerbated by the temporary suspension of trading on CME’s sterling FX futures.
The report also uses a new methodology to measure liquidity during the event and while it concludes that the market behaved as expected during the first few seconds, thereafter the speed of the move, “goes beyond that consistent with our estimates of the likely impact on prices given the quantity of orders to sell sterling”.