CLS Group reports flat FX volumes for May

abdelaziz Fathi

Total daily traded volume submitted to CLS for settlement took a step forward in May.

CLS Group

In particular, the average daily traded volume submitted to the FX settlement specialist was $1.86 trillion last month, up from $1.85 trillion in April 2022. Across a yearly timetable, the figure reflected an increase of 4 percent relative to May 2021’s $1.79 trillion.

Following a period of wide-scale volatility and increased trading activity during the initial phase of the Russo-Ukrainian war, average daily traded volumes in CLSSettlement, a payment-versus-payment settlement service, have now stabilized at lower volumes as compared to the first quarter.

CLS reported swaps volumes at $1.26 trillion in May 2022, virtually unchanged from where it had been in April 2022. Further, the figure was slightly lower year-over-year from $1.27 trillion a year ago.

In terms of CLS’ spot FX volume, the group has reported the figure at $478 billion in May 2022 compared to $475 billion in April. Additionally, the figure was higher 11 percent over a yearly basis from the $431 billion set in the previous year.

Although monthly comparisons are always vulnerable to short-term fluctuations, there was a longer-term trend of higher spot volumes. However, the curve of this increase seems to have flattened in recent months.

The positive performance was again pronounced across CLS forwards business, which yielded a figure of $127 billion last month. That was up 40 percent over a monthly basis from $115 billion in April, and also rose by 44 percent year-over-year from $88 billion in May 2021.

“In May 2022, we saw average daily traded volumes of USD1.87 trillion, an increase of 4% compared to May 2021. Over the same period, FX forward volumes were up noticeably by 45%, FX spot volumes increased by 11%, while FX swap volumes decreased by 1%,” said CLS’s Global Head of Product, Keith Tippell.

We last reported on CLS Group last week when Deutsche Bank, Mashreq and Standard Chartered revealed that they are at various stages of onboarding to CLSNet, the foreign exchange bilateral payment netting system for emerging currencies.

The milestone comes as part of a broader strategy that aims to shake off CLS’ image as a traditional settlement services provider. To date, most of the updates to CLS products were enhancements of existing services intended to make the offering more efficient.

Instead, the company, which was formed in 2002 to reduce FX settlement risks, recently has been keen to promote itself as a provider of innovative products, including post-trade risk management, aggregation and netting solutions.

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