NEX Markets, an electronic markets subsidiary of NEX Group, has just published its latest trading volumes report for August 2017. The month was a notable departure from previous years, with the traditional August lull giving way to more pronounced volatility amidst declines in the USD.
The summer months have been a mixed bag for many institutional venues – a rash of political scandals and monetary policy events shaped markets, offering plenty of drivers that have not necessarily translated into higher volumes. In many cases, big money has remained on the sidelines, leading to a narrow consolidation of trading volumes at NEX Markets and other venues.
August 2017 marked a figure of $83.0 billion daily for spot foreign exchange trading, coming in at 1.7 percent higher month-over-month from $81.6 billion daily in July 2017. Over a yearly basis however, this figure was much higher, growing by 26.6 percent year-over-year from $65.5 billion in spot FX volume from August 2016.
A steady erosion of the USD this past August as well as escalating rhetoric surrounding North Korea were the primary reasons for the disparity – both of these factors were absent in previous summer months or last August. Moving forward, the season of low volatility across the forex market has likely ceased. Volumes are likely to be trending upwards this fall after being confined to a narrow range for the past few months.
In terms of US Treasuries, NEX Group’s electronic trading subsidiary also saw a decline in this segment, reporting $131.2 billion daily during August 2017. This justified a decrease of 9.6 percent on a month basis from $145.2 billion back in July 2017. Relative to 2016, NEX’s latest figures were also lower, albeit by a more muted margin, falling 7.7 percent from $142.1 billion daily in August 2016.