Filtering out the noise: Institutional FX desks move e-dealing and market intelligence onto a new level

Nicholas Pratt examines ways in which leading institutional FX brokers are leveraging their e-dealing platforms and market intelligence services to meet the needs of clients.

The last triennial survey from the Bank of International Settlements, the equivalent of a worldwide census for the FX industry, showed that one of the most conspicuous trends of the last 10 years continues apace – the growing participation of non-banks in the FX market. In fact, the survey, published in December 2013, showed that non-dealer financial institutions were the major drivers of FX turnover growth between 2010 and 2013.  The BIS suggests there are two underlying reasons for this growth. The first is the rise in international diversification of buy-side asset portfolios. Institutional investors and hedge funds are trading more globally in search of higher returns and they need to undergo Spot FX transactions as part of those trades. “Over the past three years, equities provided investors with attractive returns and emerging market bond spreads dropped, while issuance in riskier bond market segments (eg. local currency emerging market bonds) soared,” states the BIS report....continued

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