Non-Spot FX Volumes Drift in February

While the picture in spot FX markets was mixed, with the non-primary venues seeing an increase in activity, February was a quieter month for non-spot markets, with those venues to report data seeing a decline.

LSEG FX says that non-spot volumes across its venues, which it does not break out, was $341 billion per day in February, down 5.5% from January and down 4.5% on a year-on-year basis. As was the case with the other primary spot FX venue, EBS, average daily volume (ADV) on LSEG FX’ spot venues also fell, by 4.3% from January to $90 billion – an 11.8% year-on-year decline.

Anecdotally, in a post, LSEG says volumes on its Forwards First Fixings (FFF) service on FXall, which was launched last year and enables clients to select the forward pricing on fixing transactions hours before the actual Fix takes place, has grown to $49 billion in Q1 2024. Assuming this is a precursor to final data at the actual end of the quarter, this equates to just under $1 billion per day. The firm says 14 buy side clients are receiving pricing from five LPs, with average deal size rising to $87 million from just above $20 million in Q4 2023.

Deutsche Börse’s 360T reports total FX volume of EUR 123.3 billion per day in February, down 1.1% from January and down 0.2% year-on-year. Earlier this month, the platform reported spot volumes of $27.6 billion, and using a fixed exchange rate, The Full FX estimates that non-spot volumes fell fractionally on the month, by 0.4%, and by 2% on a year-on-year basis. NDF volumes on 360T were $1.277 billion in February, down 7.9% from January, but up 12.2% from February 2023.

Elsewhere, Singapore Exchange (SGX) says its FX futures product suite saw 3,574,000 contracts traded, up 22% year-on-year. Activity was lower than January, by 16.3% on an absolute basis and by 8% on an average daily volume basis. SGX says its INR/USD futures volume hit an all-time high of a notional US$5.5 billion on 15 February, while open interest climbed to a record US$4.85 billion on 16 February.

Volume in SGX’ biggest FX contract – USD/CNH futures – was 1.941 million. Volume comparisons are trickier in this contract due to the Lunar New Year falling in January 2023, but February 2024, nevertheless activity was down 25% from January, but was up 27% from February 2023, suggesting a steady overall volume profile.