Institutional forex volumes which were down by as much as 50% during the 2009 crisis are surging again and are back to normal levels. It seems that it took forex much longer than the equities markets in order to get back to the levels we were used to seeing.
If they say that equity markets precede macro economy by six to twelve months, perhaps it means that institutional forex levels mark exactly the dates? Time will tell.
CME Group, world’s largest futures and options exchange, reported that in December 2009 the foreign exchange (FX) volume averaged 735,000 contracts per day, up 81 percent compared with the same period a year ago, reflecting average daily notional value of approximately $96 billion.
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CME Group also said it set a new trading record for forex futures Dec. 4, with notional contract volume of $185 billion, with overall currency activity up over 80%.
The bump in forex trade helped CME close out 2009 on a strong note, with a 13% daily volume increase in December from a year ago, though overall trading activity came in below November levels due to the year-end seasonal slowdown.
The exchange operator also seeks to clear over-the-counter forex swap transactions via its ClearPort facility, a new effort that Derek Sammann, managing director of financial products and services for CME, said is “internally ready” and will be tested by customers over the coming weeks.
In December, CME Group interest rate volume demonstrated the best monthly year-over-year growth in 2009, averaging 3.9 million contracts per day, up 42 percent compared with December 2008. Eurodollar futures volume averaged 1.7 million contracts per day, up 38 percent versus December 2008, while Eurodollar options volume averaged 539,000 contracts per day, up 11 percent. Treasury futures volume averaged 1.4 million contracts per day, up 64 percent compared with the same period in 2008, and Treasury options volume averaged 236,000 contracts per day, up 63 percent. CME Group equity index volume averaged 2.2 million contracts per day, down 27 percent from December 2008. CME Group foreign exchange (FX) volume averaged 735,000 contracts per day, up 81 percent compared with the same period a year ago, reflecting average daily notional value of approximately $96 billion. CME Group energy volume averaged 1.4 million contracts per day in December, up 21 percent compared with the same period last year. CME Group commodities and alternative investments volume averaged 614,000 contracts per day, up 6 percent from December 2008. CME Group metals volume averaged 273,000 contracts per day in December 2009, up 111 percent compared with the prior December.