Data Influx Plagues FX Market, but Quants May Help

The 2016 Finance Magnates London Summit is quickly approaching, with several prominent panel participants and speakers lending their analysis and perspectives on the broader financial market.

In the latest in a series of interviews, Saeed Amen, who is an author as well as co-founder and Consulting Quant for The Thalesians, gives his opinions on what is transpiring around us.

FM London Summit is quickly approaching, register here!

1. What is your position and what does your role entail?

I'm the founder of Cuemacro, a firm that does consulting on systematic trading and creates data indices to help macro traders gain insights. I spend a lot of my time trying to understand how we can model macros markets, such as FX and looking for new and unusual datasets, which can shed light on macroeconomic sentiment.

Recently, for example, I did a project for Investopedia, examining how their proprietary dataset of searches can be used to trade risky assets.

2. What was the single most important event or development that the market saw in 2016?

I think the biggest development has been that the market is becoming more used to that we are reaching the bounds of what central banks can do.

Indeed, we have seen many occasions where easing by central banks, has been accompanied by strengthening in the local currency, which is counterintuitive.

3. What are the biggest challenges that the FX trading community is facing? How do they affect your field?

Another challenge is trying to extract value from the increasing mass of information facing market participants

There are many challenges for the FX market. One is Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, in particular the pullback during times of unexpected market turbulence, which is more pronounced than it was before.

Another challenge is trying to extract value from the increasing mass of information facing market participants. This is one area where I think quant approaches can help, which is my main focus.

4. What is the main message you’d like to convey to London Summit delegates?

Whilst the FX market is facing challenges, it is still the most liquid market, and it will present trading opportunities. We sometimes forget that the FX market, is not purely a speculative market, but it is an important market, for anyone doing transactions across borders.