360T Taps Monex for Dedicated Mexico FX Credit Hub
Posted by Colin Lambert. Last updated: June 30, 2021
Credit in some local markets can be an issue that negatively impacts liquidity, as local players find their access to the global market limited. Mexico is one such market, and has led Deutsche Borse’s 360T to partner with Mexico’s Monex Casa de Bolsa to ease the problem, with the launch of a dedicated credit hub for the onshore Mexican market.
In a white paper published by 360T to coincide with the launch, the firm cites data from the Bank for International Settlements indicating that while spot peso turnover has risen globally over the past 10 years or more, onshore activity has flatlined. This is highlighted by the BIS data signalling both on and offshore turnover at around $10 billion per day in 2004, but offshore climbing to $48 billion in the 2019 Triennial Survey, but falling to $7 billion onshore over the same time.
To facilitate better access for onshore participants, and to provide global LPs with access to a broader range of counterparties, 360T has launched the first local credit hub with Monex. The firms say Monex has an “incredibly strong” credit profile and can leverage this, as well as its membership of CLS, to deliver the new hub for the 360TGTX anonymous trading platform. This delivers, they add, better pricing in MXN and other currencies from a broader range of liquidity sources. 360TGTX users with credit relationships with its other central counterparties can continue to use them to access MXN liquidity, the platform also supports bilateral credit arrangements.
“We believe that [the credit hub] will deliver many benefits to the FX market here in Mexico,” says Javier Alvarado, CEO of Monex Casa de Bolsa. “Connecting more onshore and offshore FX liquidity will help to deepen liquidity in the Mexican peso, while local market participants will also benefit from being able to access a world-class technology platform in 360TGTX that is also fully compliant with the FX Global Code of Conduct and industry best practices.”
Matt O’Hara, CEO of 360T Americas, adds, “We think this new partnership with Monex represents a major milestone for the Mexican FX market. As the first Latin American financial institution to become a member of CLS, Monex holds a very unique place within the infrastructure of the local FX market. Leveraging this to access the 360T ecosystem, which includes over 2,200 trading firms across over 75 different countries, offers the potential for tremendous growth in the local onshore market. Ultimately, we see this as the next step in the evolution of FX trading in Mexico.”