CLS Group Sees Uneven FX Volumes in March as Momentum Stalls

CLS' average daily traded volume was down nearly 5% on a monthly basis in March 2018, reporting a figure of

CLS Group has reported its volumes and aggregation services statistics for the month of the March. After seeing a staunch uptick in its trading volumes during the first two months of the year, CLS saw its metrics retreating almost across the board in March.

FX volumes had been on the uptick across institutional venues during Q1 2018, easily outperforming their 2017 counterparts. On a month-over-month basis, these figures have been rising in back to back months, although March presented a virtual roadblock to this growth.

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Despite markets seeing a healthy number of drivers, activity has been lower in March than in the past two months prior. A looming trade war wrought by the Trump administration was a culprit, though by and large FX trading were range bound, devoid of any major moves.

Looking at the latest statistics, the average daily traded volume submitted to CLS was down in March 2018. This reading came in at $1.855 trillion, down by 4.8 percent month-over-month from $1.949 trillion in February 2018. Across a yearly timetable, however, the figure was pointed higher, correlating to a 16.2 percent increase relative to March 2017’s reading of $1.596 trillion.

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In March 2018, CLS reported its swaps volumes at $1.272 trillion, down by 2.7 percent month-over-month from $1.307 trillion set back in February 2018. Once again, across a yearly interval, the latest figures were pointed upwards, justifying a 22.4 percent increase from $1.039 trillion in March 2017.

In terms of CLS’ spot FX volume, the group has reported a figure at $480.0 billion in March 2018, retreating by 11.4 percent month-over-month from $542.0 billion February 2018. The figure was also higher by 3.9 percent year-over-year from the $462.0 billion set back in March 2017.

Finally, the monthly decline did not extend to CLS’ forwards business during March 2018. This segment actually yielded a positive figure of $103.0 billion, up 3.0 percent month-over-month from $100.0 billion in February 2018. The reading was also reflective of an 8.4 percent rise year-over-year from $95.0 billion in March 2017.

Looking ahead, volatility still appears to be in healthy supply, as markets have awoken in early 2018. As opposed to 2017, which was characterized by episodic pockets of volatility, FX activity seems much stronger this year, though will need to break out of narrow trading ranges to continue growing.

Commenting on the results, David Puth, CEO at CLS, said: “There are a number of ‎drivers that have led to this outcome, not least of which is the rising trend of the buy-‎side becoming more actively involved in managing settlement risk. Today, most of the ‎world’s largest asset managers use CLS, as clients of our members, to manage ‎settlement exposure. This has materially improved liquidity management while ‎allowing buy-side participants to reduce operational errors in the 18 currencies in ‎which we settle.”‎

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