FXSpotStream volume ends string of declines on January rebound

abdelaziz Fathi

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for January 2023, which moved higher on yearly and monthly basis. Specifically, January’s total turnover came in at $1.33 trillion, which was higher by 5 percent from $1.26 trillion in the previous month and also rose by 20 percent from a year ago.

January’s average daily volume (ADV) was reported at $60.5 billion. The ADV metric was up by 5.2 percent from $67.2 billion in December 2022, and also increased 14.5 percent year-over-year when compared with $42.8 billion in January 2022.

The total monthly volume across FXSpotStream’s streaming and matching products was comfortably above the $1 trillion mark throughout 2022. The activity got off to a strong rebound as the financial markets kicked off the year in high gear, with a multitude of factors helping steer volumes across several venues.

A big jump in trading activity

These difficult conditions could become increasingly common as investors brace for plenty of hurdles as conflict between Russia and Ukraine has been causing knock-on effects globally, which pumped up FX hedging trades.

The high volatility helps FX platforms shine when the market is anxious and trading activity is high, but low volatility then hurts when things settle down. With nobody having a clue so far, other institutional FX platforms, including Cboe FX, also reported higher trading activity.

FXSpotStream provides a multibank FX aggregation service for spot FX trading. The platform operates as a bank-owned consortium that provides the infrastructure to facilitate the route of trades from clients to liquidity providers.

FXSpotStream’s offering is a client-to-bank platform, with each liquidity taker required to ‎create individual credit relationships with participating banks.‎ This differs from other multi-dealer platforms, such as FX ECNs like Hotspot and ‎EBS Markets that operate with centralized order book systems for their participants.

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