Activity on FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, fell in July, with trading volumes sliding to its lowest in more than three months as the summer lull hit activity.
During July 2018, FXSpotStream reported an average daily volume (ADV) of $27.71 billion, which represented a move lower over a monthly timeframe, as volumes incurred a fall of -8.7 percent month-over-month from $30.36 billion back in June 2018, when volumes shot up to a fresh record. However, the latest figures, which encompass all of the group’s streaming and matching products, constitute a gain of 58 percent regarding volumes from June 2018.
Daily volumes in the currency market have been hurt in July by seasonal factors and some regulatory changes, but the industry hoped the volatility following the first wave of Trump’s tariffs on Chinese goods might mark the start of a broader trend that would support more trading in general. Instead, with many traders on holiday, the volatility has fallen back to levels seen at the start of second quarter.
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FXSpotStream also saw a notable drop across its total trading volumes in July 2018 after reported just $609.7 billion for the month, down 9.5 percent month-on-month from $637.71 billion back in June 2018. The difference should come as a surprise since July 2018 saw a total of 22 trading days, compared with 21 in the month prior.
A client to bank platform
FXSpotStream is a wholly owned subsidiary of LiquidityMatch LLC and was created as a cost-effective platform, which is offered on a commission-free model for buy-side firms to tap pricing from banks using a multi-dealer aggregating platform.
The group started the streaming aggregation business in 2011 with just a spot FX API and six liquidity providers, but now utilizes liquidity from a total of twelve leading global banks – BofA Merrill Lynch, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Citi, Commerzbank AG, Credit Suisse, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Standard Chartered, and UBS.
FXSpotStream’s offering is a client to bank platform, with each liquidity taker required to create individual credit relationships with participating banks. This differs from other multi-dealer platforms such as FX ECNs like Hotspot and EBS Markets that operate with centralized order book systems for their participants.