ICE’s January Metrics See Rebound, FX Static Despite Return of Volatility

FX volume bucked an industry trend, having remained unchanged during January despite higher volatility.

Intercontinental Exchange (NYSE: ICE), a global network of exchanges and clearing houses, has reported its trading volumes for January 2018. With markets returning to full force during the first month of the calendar year, volumes rebounded across the board. In addition, with volatility back in full swing, metrics across nearly all segments have now started the year on a positive note.

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In terms of the group’s overall volumes, January 2018 seemed to erase a generally uneven tone back in Q4 2017. Rather, ICE’s futures and options business, as measured by its average daily volume (ADV), rose in January 2018 to 6.2 million contracts per day.

This represented a growth of 21.6 percent month-over-month from 5.1 million contracts per day in December 2017 – the latest reading is the highest since September 2017. Markets during January awoke after a multi-month lull, for the most part due to low volatility and seasonal declines due to the observance of holidays in key markets.

The growth seen across ICE’s futures and options figures in January was on par with the rest of the institutional space. Other venues by extension saw their own futures and options trading business score a rebound to start off the year. January 2018’s aggregated futures and options volumes were however also higher on a yearly basis by 10.7 percent from January 2017 relative to 5.6 million contracts per day.

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Commodities volumes explode to two-year high

After seeing commodities trading plotting an uneven course for much of 2017, ICE’s volumes in this segment surged to a two-year high. The price of precious metals, namely gold, were in a rapid state of flux with the USD under substantial pressure during the month, driving commodities ADV to 3.4 million contracts per day.

This was the highest reading at ICE since January 2016, surging by a margin of 23.2 percent on a month-over-month basis. In addition, the latest commodities reading in January 2018 reflected growth of 7.5 percent on a yearly basis from 3.2 million contracts per day in January 2017.

Looking at the group’s equities volumes, ICE’s equity indices ADV during January 2018 erased its recent momentum and plunged on a monthly basis. After seeing a strong figure of 591,000 contracts per day just one month ago, ICE reported just 280,000 contracts per day in January 2018. Equities proved to be one of the few weak spots of its January metrics, with the broader equity markets perhaps starting to show some signs of overheating.

The latest equity indices reading corresponded to a decline of 52.6 percent on a monthly basis, and lowest since October 2017.

FX ADV static despite volatility

For much of January, the USD was under siege as this helped jolt FX markets that had been in a static consolidation for the past two months. However, this did not correlate to any increase in spot FX trading. Rather, ICE registered a figure of 31,000 contracts per day in January 2018, unchanged on a month-over-month basis from December 2017.

The result is somewhat surprising and represents a departure from the rest of the institutional venues across the industry, all of which notched a healthy growth during January 2018.

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