CME’s FX Link Hits New High
Posted by Colin Lambert. Last updated: June 23, 2022
FX Link, CME Group’s centralised FX swaps liquidity pool, hit a new single-day record of 82,900 contracts, representing over $7.2 billion in notional volume, on June 16, surpassing March 10, 2020’s 77,146 contracts.
“This milestone reflects growing adoption of FX Link as a tool to manage risk”, said Paul Houston, global head of FX products, CME Group. “As the world’s first anonymous and centralised FX swaps liquidity pool, FX Link allows participants to gain access to alternative pricing of swaps relative to OTC, and benefit from the capital efficiencies which come from using FX futures. As a result of the increased client participation in 2022, top of book spreads have reduced and we have seen strong growth in order book depth.”
In addition to the overall volume record, FX Link achieved a new single day record in USD/JPY of 26,677 contracts, representing over $2.5 billion in notional. Thus far in June 2022, FX Link average daily volume (ADV) has grown to over 43,000 contracts per day, up from nearly 15,000 contracts per day during June 2021. This also represents approximately $3.7 billion in notional per day, a more than doubling of ADV through the end of May.
“We are excited to see market participants leverage FX Link as a source of FX swap liquidity,” says Shuo Wu, global head of forward e-trading at Deutsche Bank. “Deutsche Bank is a major liquidity provider to this marketplace as part of our market-leading portfolio of electronic trading products.”
Liyan Yu, head of e-FX swaps trading at JP Morgan, adds, “FX Link provides market participants with another tool to manage risk and gain efficiencies in their FX trading activities. We see more participants leveraging FX swaps to diversify their FX risk and our leading electronic trading franchise is well-positioned to cater for this growing market.”