CLS FX Volumes Drop 30% MoM, a Record $515B Traded on April 30

Foreign exchange settlement provider CLS Group reported its operational metrics for April 2020, which dropped on a yearly basis, and in line with peers in the industry, executed trade volumes were also much lower compared with the figures of the prior month.

The average daily traded volume submitted to CLS was 1.55 trillion in April 2020, down 30 percent month-over-month from a record $2.19 trillion in March. Across a yearly timetable, the figure also reflected a drop by four percent relative to April 2019’s figure of $1.63 trillion.

CLS said that the exception to the overall reduction in volumes was the activity observed during the end of month ‘London Fix’.

"In the hour following the fix at 16:00 BST, 30 April, a record USD515 billion was traded, a 38% increase on the previous record of USD371 billion seen on the last day of February 2020,” the company said in a statement.

CLS, or continuous linked settlement, attributes the uptick in daily activity to traders who bought euros to rebalance their portfolios which contributed to record volumes for EUR crosses, EUR/USD, EUR/JPY, EUR/AUD and EURCAD.

CLS reported swaps volumes at $1.08 trillion in April 2020, down from $1.35 trillion in March 2020, a fall of 20 percent month-over-month. Further, the figure was lower by a factor of seven percent year-over-year from $1.17 trillion a year ago.

In terms of CLS’ spot FX volume, the group has reported the figure at $379 billion in April 2020, down 46 percent relative to $707 billion in the month prior. The figure was however slightly higher over a yearly basis from the $369 billion set in the previous year.

The weak performance was again pronounced across CLS forwards business, which yielded a figure of $86 billion last month, down -33 percent over a monthly basis, and also fell by 10 percent year-over-year from $95 billion in April 2019.

ECNs were also in a sea of red

CLS Group saw record volumes in March as investors flock to safe-haven currencies amid violent market swings on fears of a Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term-fueled global recession.

In April, however, currency volumes declined at major institutional platforms as industry figures show the interest faded somewhat as investors reduced their exposure and the sheer weight of bets on central banks’ policies eased.

FX institutional ECNs were also in a sea of red in April 2020 following the boom in activity seen in March, with almost all major venues reported 50 percent drops in their monthly volumes.

FXSpotStream’s trading venue, which hits a record $1.37 trillion in March, reported only $747 billion in monthly turnover during April. Cboe’s institutional spot FX platform, which crossed the $1 trillion milestone in March amid coronavirus-driven Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term, disclosed a total trading volume of $643 billion, down -46 percent on a month-over-month basis.