TradeTech FX 2024 Blog

EFPs are chaining the FX market by combining OTC liquidity while building a futures position. In this blog, we explore Eurex's EFP offering and the 360T interface that is helping to provide a seamless trading experience. 

Pierre Jonathan and Alex Nowak of J.P. Morgan update us on recent strategy in FX markets and market structural changes.

Jay Moore, co-founder and CEO of FX Hedge Pool, discusses some of the lead drivers forcing change in FX trading.

Stephen Totten, director of quantitative analysis at OneZero Solutions, discusses how volatile market conditions this year is driving demand for more scalable and resilient FX trading systems.

Take a look at the round up of TradeTech FX Europe 2023!

Panelists from Bloomberg, AXA, Edgewater and Elysium discussed workflow automation at TradeTech FX 2023 in Paris

Speaking on the Electronification of FX swaps panel at TradeTech FX 2023,  panelists from Groupama, UBS, 360T and 24 Exchange explain why they are not prioritising FX swaps algorithms

In 2022, FX markets have been tossed and turned by turbulent central bank policies, war in Europe, and the need to move in and out of international investment positions at speed. For FX traders, managing risk in such a volatile environment needs near real-time visibility, with effective feedback loops providing analytics directly from the market back to the desk to help deliver pricing to customers. The ability to support pricing more effectively, allows dealers to reduce internal latency that in turn improves the buy-side firm’s trading performance, as well as allowing the dealer to optimise the spread to support profitability and competitive pricing. Stuart Brock, head of business development at oneZero, explains how sell-side firms can boost the trading capabilities on their FX desk, and how that can directly impact performance.

Both developed (DM) and emerging market (EM) FX trading is being bucked by volatility this year. Emerging markets, an umbrella term covering many disparate markets with both major and minor currency pairs, suffers from a more fragmented liquidity and risk picture than developed market currency pairs. This has a major impact on the ability of investment firms to trade in EM equity and bond markets when an FX trade is also required. When liquidity is not guaranteed, and markets are unpredictable a buy-side desk can struggle to model the risks of EM FX trading effectively.

With big moves for many dollar currency pairs over the past two weeks, getting access to liquidity in the most efficient manner has been thrown into sharp focus. Traditional buy- and sell-side relationships are key but present limits. Concentration risk of providers can multiply trading costs by masking the level of relationships needed to find the other side of a trade.

FX trading for sell-side firms has seen rising costs as a result of regulatory friction. Uncleared margin rules (UMR) and capital requirements via the Standardised Approach for Counterparty Credit Risk (SA-CCR), are adding to the operational burden of trading. Non-deliverable forwards (NDFs) and FX options are in scope for UMR, while swaps and forwards are also caught in the calculation of capital charges. Increased efficiency in the management of trades, by providing access to clearing in swaps, forwards and NDFs, dealers can optimise their capital and collateral management to actively reduce the cost of trading, say Sally Francis-Cole of London Stock Exchange Group and Andrew Batchelor of ForexClear.

The Ukraine Conflict with Russia and the impact on foreign exchange trading from a buy-side point of view – an in-depth look at how this conflict is affecting buy-side and corporates...

Non-deliverable forwards (NDFs) are a key tool in FX today, offering easy access to illiquid currencies in emerging markets. But is that always a good thing? There are a range of developing themes in emerging markets that investors must consider, some of which have the potential to cause volatility in FX.

How buy-side firms are reviewing cryptocurrency for foreign exchange trading - the evolving institutional crypto-assets market, as well as how central banks are working on their own crypto offering.

Data paints the picture of liquidity and price formation for FX traders, and its understanding is key to the trading desk as firms increase their automation of processes – and management of higher touch trading – within FX spot and derivatives markets. Refinitiv's Bart Joris and Alex Goraieb discuss how transparency, execution and efficient workflows on FX Trading Desk all start with data.

Transparency issues need to be addressed in the last-look process if FX trading is to deliver best execution fairly. Analytics can help users to understand the types of flow they are sending to liquidity providers and then make informed decisions on how to route orders between liquidity providers. Dennis Weissert and Stuart Brock of oneZero outline the barriers to transparency and ow to overcome them.

Rethinking the market structure of FX could allow significant cost savings and risk reduction through more effective provision of liquidity. Market impact of large hedges – and even smaller trades – can have an outsized effect on trading costs through traditional channels. As a result, say Jay Moore CEO of FXHP, a model for banks and client to use that reduces the need for credit and risk to be provided to the buy-side by the sell-side is proving a massive success with over US200 billion traded a month.

Ever since the COVID-19 pandemic came into our lives back in the early part of 2020, industries all over the globe have been scrambling to adapt and evolve. Carrying out business in this new world brings with it significant challenges this is true, but also a lot of opportunity.

New 2021 research by WBR surveyed 100 heads of FX Trading and from buy-side and sell-side firms across Europe, in an effort to discover what challenges the COVID-19 crisis had brought to their corner of the industry and what they were doing to fight back against the tide.