Bloomberg Expands Pricing Quality Analytics on FXGO
Posted by Colin Lambert. Last updated: August 12, 2023
With The Full FX View
Bloomberg has added a new suite of FX pricing quality tools, available to FXGO clients through the firm’s multi-asset e-trading reporting tool MISX. With the new solution users can now quickly analyse and dissect pricing quality and performance for any RFQ pricing requests, including batch trades, sent over FXGO.
Bloomberg says price makers can also utilise MISX Pricing Quality Analytics to more quickly identify where opportunities to price are being missed and why, such as due to internal counterparty setup, enablement issues, or internal credit rejects. By identifying instruments and currency pairs where they are missing flow because of pricing quality issues, the firm says price makers can better understand how and where to improve their setup and pricing quality to win more business over FXGO.
Conversely, price takers can use the analytics to investigate how often a counterparty priced and won the trade, were runner up with the “Best Alternative” price, or placed somewhere in the pack. Price takers can also measure how often a counterparty declined to price, failed to pick up the request, or rejected a request to deal. “These tools help to build a more complete picture as to where counterparty pricing quality is consistently superior as well as where and with whom pricing quality needs to improve,” Bloomberg states.
MISX is accessible from the Bloomberg Terminal and can be scheduled to be run and sent to the clients Bloomberg e-mail or SFTP site. They are available both on demand or to a schedule. The data is presented numerically, Bloomberg says this is the preferred method for clients, who can export the data to Excel for further analysis and use in graphical presentations.
Takers also have access to a comparative set of event lifecycle data to also analyse the outcomes of their own pricing requests and to further enhance their analysis of their LPs.
“The additional information, especially the “Best Alternative” data, has enabled us to identify areas where we can further improve the pricing quality for our clients,” says Guillaume Carreno, global head of electronic client connectivity at Crédit Agricole CIB. “The productivity efficiency we gain with this new feature is an important added value.”
Tod Van Name, global head of FX e-trading at Bloomberg, adds, “Transparency and the availability of real-time information is a vital part of successful trading operations for our clients, and we are always working to enhance FXGO capabilities to meet this need. These new Pricing Quality Analytics in MISX provide both buy and sell-side market participants with unparalleled breadth and depth of analysis and output, that can help them make more informed trading decisions and achieve better outcomes.”
The Full FX View
This is another step forward in the FX market with a major platform such as Bloomberg enhancing the quality of the analytics available to both makers and takers. Other platforms have also made this move, of course, but the really good news is it is now the minority that do not.
There is a sense that relationships between makers and takers have, if not improved – there will always be a degree of tension, which is healthy – then certainly stabilised, and this is largely due to the availability of better, independent data. If both sides of the relationship are looking at the same data there will still be differences but they will be minor – not least, as noted by Bloomberg, rather than think there is nothing in a certain relationship, LPs will have the ability to tweak their service to win more business. It is not always about the pricing, sometimes responsiveness can also play a part, for example.
On the other side of the equation, there is little doubt that some takers’ style of execution is problematic for a lot of LPs. Again, with data from a third-party to hand, this can be easier explained to that client, who may indeed find that they end up with better results after a relatively minor execution style tweak.
It is good to see the platform world really start to gather momentum when it comes to relationship-based analytics – a lot is said in this space about being a facilitator, but that means much more than providing neutral ground on which to engage. More pertinent in the increasingly electronic age is these venues provide genuinely useful data that both parties will want to use.
This could also be a timely move for Bloomberg as well, because, although the platform doesn’t publish volume numbers, the understanding is that a lot of non-spot business goes through both FXGO and the Chat service. Increasingly clients are starting to look at their pricing quality away from spot – especially in FX swaps for example, As this trend continues, it is important that a platform supporting a substantial amount of trading in the product, is ahead of the game when it comes to pricing quality analytics.
