Feature
Exotic FX option losses in 2008 still haunt market
SMEs have returned to option strategies since the financial crisis, but in a more nuanced way
Minding the liquidity gap
Last year, murmurs started amongst FX market participants that liquidity was increasingly a cause for concern. Those fears have now become a reality, and the quest to find the cause and solution for diminished execution capacity is now well and truly on
Emerging markets liquidity hit as banks pull back from risk warehousing
The difficulties of trading currency positions in G10 markets are exacerbated in EM, according to traders
Banks and clients rebuild relationships post-SNB move
Trade pricing difficulties since the Swiss National Bank's removal of the franc's currency floor are causing friction with clients
China, the new land of opportunity for retail
The country's FX retail market has grown quickly in recent years and offers unprecedented opportunities. It is also about to undergo a major shift
FEMR responses show split on last look debate
Market participants are split on how and if last look practices should be regulated
Currency manager calls for Swiss franc liquidity inquest
The collapse of foreign exchange liquidity during and after the huge Swiss franc move on January 15 caught market participants by surprise. Some are calling for an official enquiry
Challenger platforms face first real test as FX markets pick up
Numerous trading platforms have sprung up since 2011, bang in the middle of years of stagnating volumes. As volatility comes roaring back, they face a crucial year
Prime of prime providers see growth despite SNB fallout
Credit provision to smaller firms is increasingly becoming the domain of PoPs, but the focus will shift to pre-trade risk management
FX Focus - Doubts over agency desk execution grow
Banks are turning to agency desk execution to cut the cost of trading. Some market participants claim it could be the source of as much as half of all turnover in the FX market within five years. Others are more sceptical, and there are fears that a mass…
FX Focus - How to reform FX benchmarking
The long-running investigation into FX benchmarks looks to be coming to a close, with banks being hit by fines running into the hundreds of millions of dollars. Attention will now turn to the myriad possible reforms to the fixing process. Which changes…
Dollar bull run threatens corporate earnings
The days of not hedging earnings risk are over for many corporates, according to banks and treasurers, with the dollar's strength and more international trade set to be the catalyst
FX Focus - Corporates accused of pricing complacency
Corporates are in a pricing ‘nirvana’ at the moment. Hedging is cheap, transparent and easy, but how long will this last? Some treasurers have concerns over complacency towards the impact of market volatility, while regulatory reform could push up prices…
FX Focus - No corporate love for Clobs
Corporates have yet to yield to the charm of central limit order books, as regulatory pressures and pricing issues keep them tied to the request-for-quote model. Meanwhile, swap execution facility liquidity is improving, but worries over market…
Consultants fear mis-selling as forex brokers discover new options
Foreign exchange brokers – which execute spot and forward currency trades with smaller businesses – are now offering options-based structures to clients in the UK. Consultants worry about the potential for mis-selling as the trades they are seeing are…
FX Focus - The regulation blues
Senior bankers have often derided the Basel Committee’s intraday liquidity measure as an ineffective and burdensome piece of regulatory overkill. Nevertheless, they will be expected to implement it from January 2015. Readiness isn’t perfect, and banks…
FX Focus - The magic world of cash management
Several of the largest banks have merged treasury and FX desk services to help clients dispense with costly local currency accounts. Corporate treasurers have often viewed this as some form of alchemy, but the significant savings promised by banks seem…
To fund or not to fund?
Low-volatility, low-yielding currencies may favour carry trade, but there are no high-yielding alternatives to buy
Trade surveillance comes with a hefty price tag
Costs subject to rate and volume of transactions, and number of locations
FX Focus - Banks fear Sef arbitrageurs
Some banks are scared to make prices on platforms offering both order book and request-for-quote trading, claiming users may be able to game them by using the two approaches in conjunction, with the result that dealers stop being 24-7 liquidity providers…
FX Focus - Sef volumes still struggling
Sef volumes are struggling to get off the ground as the industry waits for trading options and NDFs via a Sef to become mandatory. Can smaller Sefs survive this barren patch? By Michael Watt
FX Focus - Is Sef equivalency still solvable?
Negotiations for an equivalency system to allow European platforms to offer Sef-like liquidity to US persons fell apart in mid-May. Participants blame CFTC intransigence and warn of permanent fragmentation of the market. Can a solution still be found?…
Market participants lose out as renminbi volatility increases
The renminbi’s depreciation in early 2014 caused a scramble among FX users, and there may be more volatility on the way
NDF liquidity in doubt as clearing approaches
Central clearing has been a long time coming for the non-deliverable forwards market and participants worry its eventual arrival may damage liquidity. By Robert Mackenzie Smith