Institutional FX Trading Falls Double Digits in July – SEF Tracker Shows

Options, rates, and FX trading volumes all declined MoM in July, SEF monthly tracker shows.

FIA, a global trade organization for the futures, options and centrally cleared derivatives, has released its latest swap execution facility (SEF) tracker for July 2016, which showed a decrease in FX trading MoM relative to June 2016, as well as a slight shakeup in distribution.

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In terms of rates during July 2016, total trading averaged $354.5 billion per day, which was down -29.7% from June 2016, though actually higher YoY by a margin of 4.3% from July 2015.

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FX Trading Volume Retreats

Looking at foreign exchange (FX) however, the total trading in July 2016 came in at $32.7 billion per day, reflective of a decrease of -13.9% from June 2016, and virtually unchanged YoY from June 2015. Moreover, average daily trading in non-deliverable forwards (NDFs) was $19.7 billion per day, falling by a factor of -11.0% from June 2016, and -3.9% YoY from a July 2015.

The main culprit for a decrease of trading volume in July 2016 can be attributed to a waning of volatility following the Brexit referendum that gripped financial markets in June 2016. Since then, most exchanges have experienced lower volumes and statistics given seasonal slowdowns in trading.

Options trading was also down during July 2016, yielding an average volume of $12.5 billion per day, which was good for a decline of -18.7% from June 2016, and -5.8% YoY from July 2015.

The overall market share for the FX market was also somewhat different in July 2016 relative to the month prior. In June 2016, BGC led the way with 28.1% (vs. 28.5% in June 2016), followed by ICAP with 21.8% (vs. 21.9% in June 2016), Tullett Prebon with 16.8% (15.6% in June 2016), GFI with 15.3% (vs. 15.3% in June 2016), Tradition with 13.3% (vs. 14.3% in Jun 2016), and others with 4.7% (vs. 4.4% in June 2016).

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