ICE’s Volumes Largely Static in May, FX Bounces Off Yearly Lows on Volatility

Risk factors influenced a variety of trading segments in May, with ADV sticking to a tight consolidation.

Intercontinental Exchange (NYSE: ICE), a global network of exchanges and clearing houses, has reported its aggregated trading statistics for May 2017. In light of European and US market jitters, volumes were lower across the board with the exception of foreign exchange figures, given the impact of market volatility during the month.

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May 2017 was dictated by several developments in both the United States and Europe, all of which influenced the markets. In the US, this included the political fallout of the Trump administration dealing with investigations and other internal woes. Europe’s focus was centered on France and the passage of its elections.

With markets spooked by multiple risk factors in May, ICE’s futures and options business, as measured by its average daily volume (ADV), took another monthly hit, being reported at 5.5 million contracts per day. This is a decline of 5.2 percent month-over-month from 5.8 million contracts per day in April 2017. This latest figure now marks a second monthly decline in this area after peaking at 6.6 million contracts per day in March this year. Year-to-date, the volumes are also stagnant, relative to January 2017.

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The latest results were largely on par with other institution trading venues worldwide, as other global players in the US and UK clung to a relatively narrow consolidation from the month prior. However, May 2017’s total futures and options volumes were higher across the board on a year-over-year basis. ADV was noticeably higher in May 2017 by a factor of 27.0 percent year-over-year from 4.3 million per day in May 2016.

Commodities Volumes Stabilize

One component of ICE’s business that was able to avoid a decline was across its commodities volume, as the exchange report an ADV of 3.29 million contracts per day in May 2017, nearly unchanged month-over-month from 3.27 million contracts per day in April 2017. Commodities ADV did rise 23.2 percent year-over-year compared with 2.67 million contracts per day during May 2016. Precious metals were one of the most actively moving instruments in May, as gold in particular benefitted from declines in the USD as well as other risk factors in the market.

Looking at the group’s equities volumes, ICE’s equity indices ADV during May 2017 saw a reading of 388,000 contracts per day, virtually unchanged month-over-month from 390,000 contracts per day in April 2017. This segment has been fairly steady in 2017 with the exception of March 2017, which peaked at 712,000 contracts per month.

FX ADV Rebounds off 2017 Lows

Finally, ICE’s foreign exchange and credit volumes during May 2017 did manage to rise to an ADV of 31,000 contracts per day – bouncing off its lowest reading of the year – increasing by a margin of 10.7 percent month-over-month from 28,000 contracts per day in April 2017. These volumes also registered a growth of 34.8 percent year-over-year from just 23,000 contracts per day in May 2016. FX volumes in particular have been affected by pockets of volatility in 2017, which have fluctuated throughout H1, ultimately causing sizable swings in trading activity.

Looking ahead, the US Federal Reserve’s potential monetary action in June could also yield some movement across major financial instruments during the month. In addition, markets will be digesting risk events such as the UK election, with FX markets seeing some plausibility of a shakeup in the UK government.

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