CLS Group, a leading provider of risk mitigation and settlement services for foreign exchange (forex) dealers and institutions, on Tuesday reported its operational metrics for September 2019.
In the FX markets, most trading providers reported an uptick in trading volumes during August, as volatility returned to the market. However, in September, most brokers have posted a month-on-month fall.
The average daily trading volume submitted to CLS, however, goes against this trend, as August noted a rather flat month for the company, and September has actually managed to achieve solid volumes.
During September, the total average daily traded volume submitted to CLS was $1.842 trillion. When measuring this against the previous month, this is higher by 5.3 percent; it has also risen by 6.5 percent year-on-year.
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Swap FX leads the way on CLS
The total monthly volume is based on three trading sections – swap FX, spot FX, and FX forward contracts. Out of the three, swap FX has by far attracted the highest average daily volume during September.
In particular, an average daily traded volume of $1.342 trillion was submitted to CLS during September. Against August, last month’s figure has increased by 12.0 percent. It is also higher than the $1.199 trillion ADV recorded in September of 2018 by 11.9 percent.
According to Rob Franolic, who is CLS’s Data Officer, the increased FX swap activity is: “consistent with increased hedging, reflecting concerns around geo-political risks such as Brexit and US-China trade relations.”
Moving on to the trading volumes for FX spot, which generates the second-highest volumes for CLS, September noted an ADV of $406 billion. Unlike Swap FX, this figure is actually lower on both a monthly and yearly comparison. In particular, it has fallen by 7.9 percent and 9.2 percent respectively.
The final segment, forex forwards, recorded an average daily volume of $94 billion during the ninth month of the year. Although this has fallen against August by 15.3 percent, it has still managed to increase by 13.3 percent year-on-year.