IG Group to Miss FY2014 Revenue Expectations as FX Volumes Tumble Recently

IG Group has issued what is expected to be its final Trading Update before it closes its 2014 fiscal year ending on June 1st. Citing weakness in the FX market, IG Group expects revenues to fall below expectations. However, they stated: “Earnings and cash generation remain on track,” due to a decrease in expected operating costs. The top line weakness occurs after the broker forecasted in March that it expected to meet full-year revenue estimates on higher year-over-year growth.

In its statement, IG Group specifically pointed out to a recent drop in volumes as they reported : “Trading has been generally subdued since the Interim Management Statement was published in the middle of March, with the relative weakness most evident in May.” The drop in May volumes occurs after industry wide weakness in the FX markets took place in April. Speaking to trading and sales desks this month, sources have also related to Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates similar experiences as IG Group, with a few insiders going as far as to say it’s the “slowest market they remember in years." In regards to IG, the broker did conclude its statement saying that it continues to “make good” on plans it had noted in January and will be reporting updated FY2014 results in July.

Overall FX volumes have been adversely affected by a decline in volatility as markets have been range bound. The lack of movement occurred even as the US Fed has begun to advance rhetoric about exiting and tapering its quantitative easing policies which was expected to drive Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term back into the markets. However, despite expectations of Fed tightening and higher borrowing costs, interest rates of long dated US debt has actually declined. As such, this has led to a rising belief among traders that despite a reduction in Fed purchases of US debt, other central banks, such as the ECB, have stepped in to bid them higher to ensure the existing low interest rate environment remains.