CLS Volumes Reflect Year-End Slowdown
Posted by Colin Lambert. Last updated: January 16, 2025
Lower activity in FX markets in December is reflected in data from settlement services provider CLS, which reports a sharp drop in activity in spot and outright forwards in particular.
Across all FX products, the service handled average daily volume (ADV) of $2.034 trillion, a 7.7% decline from November, but up 3.4% year-on-year. The headline numbers reflect a divergence between products, however, with spot and outright forward volume declines from December 2023 being compensated for by an increase in FX swap activity.
While a 16% drop in spot volumes from November to $474 billion was not unexpected given those FX platforms to report data had already signalled what is largely a traditional drop-off in December, the depth of the decline in outright forwards is a little surprising – the product set dropping 37.6% from over $210 billion per day to $131 billion.
Year-on-year, spot volumes were also down in line with many of the platforms, by 4.8% at CLS, bit in outrights, activity was 27.2% lower than the year before. Outright forwards has been a success story for CLS over the past two years, indeed December volumes were the lowest since December 2022.
As noted, FX swaps activity compensated, with ADV coming in at $1.429 trillion, barely changed from November’s $1.43 trillion. Year-on-year, however, this is up 10.9%.
Separately, CLS reports that the average daily netted value in CLSNet rose by 22% year-on-year in the fourth quarter of 2024 to $162 billion. This was partly due to a new record daily netted value of $620 billion on 18 December 2024.