It’s the second week of August and major forex markets have reported their spot transaction figures for July.
In June, Finance Magnates reported that forex trading volumes across major markets remained flat with no significant increases.
So, how did July go? How did institutional investors and interdealers perform at the over-the-counter markets of the just-ended month? Data is the pointer.
Euronext FX
Finance Magnates' study of the volumes metrics released by the major forex spot markets covered in this analysis show that market volumes decreased month-over-month (MoM) across the venues.
Data released on Monday by the European New Exchange Technology (Euronext) showed that the pan-European derivatives exchange recorded an 11.8% slump in July in its forex spot trading market.
Euronext, which operates regulated markets in Belgium, France and Italy, among other countries, said its forex spot transactions were valued at $499.9 billion in July.
Similarly, Euronext FX’s average daily volume (ADV) dropped to $21.4 billion in July from June 2022’s $23.2 billion. This result translates to a 7.6% drop in the forex spot ADV.
Two months ago, Euronext FX had posted $510,089 billion in spot volume, seeing a marginal 0.2% growth at the time.
However, while Euronext FX’s spot volume dropped month-over-month in July, the value of contracted exchange on the platform climbed 12.6% year-over-year (YoY) from the $399.64 billion seen in July 2021.
Additionally, the pan-European derivatives exchange’s forex spot volume surged YoY in its ADV and year-to-date volumes.
The ADV shot up 17.9% to $21.4 billion as against the $18.2 billion seen in the same period last year.
On the other hand, forex spot volume YTD rose to $23.8.trillion, which is a 20.1% increase from July 2021’s $19.74 billion.
Cboe FX Markets
According to data published last week, Cboe FX Markets, a forex spot venue for institutional investors, generated a turnover of $801.9 billion in volume in July. ADV for the month came in at $38.18 billion.
In June, Cboe FX Markets reported $873.6 billion in total forex spot volume and $39.7 billion in ADV, representing an 8% and approximate 4% decline in performance, respectively. Finance Magnates reports that the dip is likely the effect of the summer holidays on the markets.
Like Euronext FX, when calculated on a YoY basis, Cboe FX Markets’ spot forex volume strengthened by 11.4% from July 2021’s $719 billion.
Chicago Mercantile Exchange’s EBS
Chicago Mercantile Exchange (CME) Group’s Electronic Broking Services (EBS) posted $64.5 billion average daily notional value (ADNV) in forex spot trades in July.
This is a 1.4% MoM decrease and a 12% YoY increase from the $65.4 billion recorded in June.
Furthermore, the EBS recorded 959,000 contracts ADV in July.
The EBS, a wholesale electronic trading platform owned by the CME Group, started out as a joint partnership between several top banks.
Meanwhile, Paul Houston, the Global Head of FX at CME Group, told Finance Magnates that total forex spot transactions on CME FX Link, a spot forex service at CME Globex, skyrocketed 46% YoY in July 2022.
The ADV on CMF FX Link also received a 75% boost in its YTD volumes compared to July 2021, Houston said.
According to CME Group, the CME Globex is its premier electronic trading system that provides global connectivity to the broadest array of futures and options. This connectivity cuts across all asset classes.
FXSpotStream
Last week, FXSpotStream published its trading volumes for July, seeing only a 0.31% MoM growth in its ADV. The daily average came in at $64.04 billion.
Nonetheless, the multibank FX aggregation service provider said its July performance was the second best in its operational history. The volume trails behind March’s $70.1 billion.
Additionally, on a YoY basis, the July ADV figure is a 33.66% growth rate from the same period last year.
Meanwhile, in terms of total volume, FXSpotStream recorded an impressive 27.58% growth rate to reach $1.345 trillion last month.
The bank-owned consortium said the volume marked the seventh time it generated more than $1 trillion in volume in a month.
With forex spot contracts moving from a flat demand rate in June to decreases, month-over-month, in March (despite the year-over-year surges), it remains to be seen what shape the forex spot market will produce at the end of August.
