EBS Closes a Slow 2016 in FX with Green Shoots

The foreign exchange unit of NEX Group, formerly known as ICAP, marked a yearly decline.

The foreign exchange trading unit of NEX Group, the company formerly known as ICAP, has announced its trading volumes for the final month of 2016. The Electronic Communications Network (ECN) for foreign exchange trading has also announced its yearly figures to recap what has been a year of transformation for the company.

The end of the year for EBS was marked by a monthly decline in trading volumes which is seasonally expected. December’s holidays have greatly affected the markets with all eyes set on the upcoming inauguration of President Trump on the 20th of January.

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During the final month of 2016, NEX Group’s EBS unit reported a 22 percent monthly decline in trading volumes to 89.6 billion daily. The figure is 20 percent higher when compared to December 2015.

Looking at the full year, the average daily volumes for the company registered a 6 percent decline when compared to 2015.

Commenting on some details of the announcement to Finance Magnates, a NEX Group spokesperson shared: “EBS’ NDF volumes fell versus November. CNH volumes were down compared to November volumes which were particularly high given that the onshore PBOC fixing was set at 6.9085/USD, the weakest level since June 2008.”

The company’s FX business is likely to benefit from higher volatility in 2017. If it closes 2017 with higher volumes year-on-year, the yearly decline of 2016 could be reversed. However, increasing competition from smaller ECNs like Fastmatch, GTX and FX SpotStream is likely to keep the heat on bigger providers like EBS and Hotspot.

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NEX Group BrokerTec Treasuries and Repos Trading Volumes

The other electronic trading markets for the company include BrokerTec’s US Treasuries and US repos. Average daily volumes (ADVs) transacted via NEX Group’s US Treasury trading platform increased by 7 percent when compared to December 2015.

The numbers represented a monthly decline of 29 percent. The average daily volume total on this market for 2016 was $167.2 billion  which is higher by 1 percent when compared to 2015’s average.

“BrokerTec benchmark volumes eclipsed $200 billion during three trading sessions in December before settling in a lower volume environment during the last two weeks of the month,” the company elaborated in its statement to Finance Magnates.

Looking at the US Repo market, the ADV figure for December was $233.7 billion, which is higher by 5 percent when compared to the same month in 2015 and lower by 3 percent when compared to November 2016.

“US repo volumes at FICC continued to run on the high side.” the company stated and elaborated in a statement that .

European Repo market transactions totalled €181.3 billion in December, which is lower by 6 percent when compared to the previous month and higher by 8 percent when compared to December 2015.

“For early December nominal Repo volumes averaged over €200 billion but term activity did slow as a scarcity of collateral became more evident and the closing of the December Bund futures contract impacted turnover. In contrast, activity and demand for Spanish debt remained much more robust over the period,” NEX Group elaborated on the European Repo market.

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