FX and U.S. Treasury trading volumes picked up in May 2018 as the steady appreciation in US dollar coincided with the continued uptick of 10-year U.S. yield which reached 3.12 percent, its highest level in nearly seven years.
Daily volume in spot foreign exchange on NEX’s EBS platform, one of the largest FX institutional trading platforms, averaged $101.3 billion last month, the highest since February and up 25 percent from a year earlier. On a month-over-month basis, the figure is also 21 percent higher from $83.4 billion daily reported during April 2018, data released by NEX Group plc showed on Monday.
The weak volumes in April corroborated a recent downtrend in volumes across the industry, snapping momentum seen in Q1 of this year.
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 April’s weak performance and built on its robust performance in 2018, with trading volumes setting fresh records.
Towards the end of May, rising yields on US Treasuries led to a stronger US dollar, and an increase in volumes as strong inflation and employment data boosted odds of a third additional rate rise by the Federal Reserve.
Separately, the average daily volume of US repurchase agreements (repo) was $229 billion in April, down 2 percent from March but up 6 percent from a year earlier.