Volume Surge Points to High BIS FX Turnover Number

The explosion in volatility in the first three weeks of April has fuelled a surge in FX volumes, and is highly likely to presage yet another record datapoint from the latest Bank for International Settlements Triennial Survey of FX Turnover, which is taken this month and published in September.

Already platforms such as Cboe FX, Euronext FX and 360T have seen spot volume records, with all three printing multiple days more than double their average in 2024. The same was true of CME Group, where total FX volume, across futures and OTC, was over double its 2024 average on 3 April, when the details of the US tariffs were unveiled.

It was notable at the time, that activity seemed more focused on G10 markets and the dollar, for NDF venues did not see new records in early April – that, however, has now changed. 24 Exchange has announced it printed $7.5 billion on 11 April, while both 360T and Cboe FX SEF also hit new peaks – and again the peaks were close to double the 2024 average with 360T hitting just under $2.5 billion on 15 April and Cboe SEF over $5.4 billion on 9 April.

Perhaps the biggest indicator of exactly how busy things are, however, can be found in spot data from CLS, which shows that four of the service’s seven busiest days in its history, have come in April. Data from the settlement service provider seen by The Full FX shows that 3 April was the second busiest day in CLS’ history at just over $1.122 trillion settled in spot, only beaten by the October 2014 flash event in US Treasuries at just over $1.123 trillion.

An interesting factoid from that data is how average trade size has risen over the past 10-12 years. In 2014, the average spot trade settled by CLS was just over $1.051 million, while on 3 April it was just over $1.132 million. For many years now we have been used to trade sizes shrinking, but perhaps the CLS data reinforces that from the UK and US FX committees earlier this year, who both reported higher average trade size. This could be a signal that traders are (finally perhaps) paying more attention to information leakage, and avoiding LPs and venues where smaller trade sizes are prevalent.

The third busiest day thus far for CLS was, perhaps unsurprisingly, the day the Swiss National Bank unpegged EUR/CHF with all the mayhem that ensued – October 2014 again makes an appearance at the fourth busiest day, following Japan’s announcement of quantitative easing.

From there, though, it is all about the last couple of weeks, with the service settling in excess of $1 trillion on 4,7 and 9 April, although on these days, average trade sizes were lower again – albeit still above 2014.

CLS is likely to have seen a surge in non-spot volumes as well, especially as doubts grew over the depth of likely Federal Reserve interest rate cuts, all of which points to a very large BIS number when it is published – some are even talking $10 trillion per day. Obviously, the extended holiday weekend in Europe will dampen activity somewhat, but the bigger picture is that while markets are getting a little bit of tariff fatigue, the policy vacillations in the US are likely to keep them busy.

Even so, looking at month-to-date volumes from those platforms to publish, it is clear that even with a drop off for the last few days of the month, we are likely to see a huge increase in spot volumes alone. Compared to 2022, on just the platforms, volume is likely to be some 65-70% higher, but a feature of current market conditions is more customers trading direct, therefore the boost, when LPs report their data to the central banks, could be even higher.

This suggests that the spot ADV measured by the BIS will easily exceed $3 trillion per day for the first time, and could of course, be closer to $4 trillion – a number that accounted for the whole FX market in 2010. With FX swap volumes largely flat since the 2022 survey, but likely to have also been boosted in the last month, as well as more interest in outright forwards and options, rather than a “BIS number” just above $8 trillion per day, we could be looking at something in excess of $9 trillion.

It may not last, but things are clearly very nice in the FX garden, if you’re in the volume game.