FX and U.S. Treasury trading volumes picked up in September 2018 as the steady appreciation in US dollar coincided with the continued uptick of a 10-year US yield which has recently reached its highest level in nearly seven years.
Daily volume in spot foreign exchange on NEX Markets’ platform, one of the largest FX institutional trading platforms, averaged $86.1 billion last month, the highest since June and up 2 percent from $84.7 billion in August 2018. On a year-over-year basis, however, the figure is 12 percent lower from $97.4 billion daily reported during September 2017, data released by NEX Group plc showed on Tuesday.
The stronger volumes in September corroborated a recent rebound in volumes across the industry, snapping momentum seen in the last two months.
NEX is a financial technology company that matches buyers and sellers of bonds, swaps, and currencies. Formerly called ICAP, NEX Group rebranded as an electronic trading, post-trade, and fintech company after Tullett Prebon bought its voice trading business for £1.3 billion ($1.6 billion) in 2016.
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Earlier in March, the UK-based Fintech company received a proposal from CME Group to acquire its shares at an indicative cash price of £10 ($14) per share, which would value NEX at £3.80 billion ($5.35 billion).
Brokers and ECNs have snapped the summer’s weak performance and built on its robust performance in 2018, with trading volumes setting fresh records at certain venues.
Towards the end of September, the Federal Reserve’s decision to hike rates and affirmation of policy tightening cycle led to a stronger US dollar, and an increase in volumes as strong inflation and employment data boosted odds of additional rate rises.
Separately, the average daily volume of US repurchase agreements (repo) was $226 billion in April, down four percent from a year earlier but inched up by a similar percentage compared to August.