SGX’s November Renminbi Futures Strike All-Time High Amidst Volatility

The SGX's latest volumes show a strong uptick in USD/CNH futures contracts MoM.

The Singapore Exchange (SGX) has reached a new milestone in November, scoring an all-time time in its open interest for USD/CNH futures in what has been billed as one of the wildest trading months of the calendar year, per a company statement.

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USD/CNH futures contracts have been growing in every month since June 2016, with the past few months surpassing previous yearly highs set back in January 2016. November 2016 reached a new threshold, seeing a fresh all-time high during the month, including 21,083 contracts ($2.1 billion in notional value outstanding) on November 28th.

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Volatile Trading Sparks Record Volumes 

The primary causes of this trend have been an uptick in volatility, which previously reached a climax last month due to the widespread consequences of the US election on the broader market. Since then, market participants have been more aggressively hedging amidst heightened volatility, contributing to the increase in trading.

In particular, average daily volume (ADV) for SGX USD/CNH futures managed to grow 66.0% MoM to a fresh high of 4,462 contracts ($446 million notional) traded per day in November 2016. Looking closer at the volumes, the offshore renminbi (CNH) also experienced a more pronounced weakness against the USD during the month of November.

The latest volumes also serve as a prelude for this month’s upcoming volumes report at SGX, just one month after a lackluster performance across the exchange. October 2016 was the antithesis of November, which was notably devoid of any major market moves or episodic events.

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