Institutional FX in red: FXSpotStream volume hits 15-month low
FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for April 2023, which moved lower on a yearly basis and also reflected weak performance across executed trade volumes when weighed against the figures of the prior month.
In particular, total volumes submitted to FXSpotStream was down by more than a third in April month-over-month, coming in at $1.10 trillion from $1.53 trillion in March, ending a consecutive string of increases this year. Across a yearly timetable, the figure reflected a drop of 14 percent relative to 2022’s figure of $1.28 trillion.
April’s average daily volume (ADV) was reported at $55.3 billion, the lowest since January 2022. The ADV metric was down by 17 percent from $66.7 billion in March 2023, and also decreased -9.7 percent year-over-year when compared with $61.2 billion in April 2022.
The average monthly volume across FXSpotStream’s streaming and matching products was comfortably above the $1.3 trillion mark in the Q1 2023. 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 lower 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.
