The recent Bank for International Settlements FX market survey unvelied a number of trends. One that didn’t get much coverage was some of the reordering of the top ten trading centers around the world. Not huge shifts but interesting nonetheless. For example, Switzerland – home of two of the largest FX trading banks in UBS and Credit Suisse dropped from the third largest trading center in 2007 to the 5th largest in 2010. Moving ahead and up a spot each was Japan (now 3rd) and Singapore (now 4th). The answer for the shift could be connected to the credit crisis of 2008 – Asia was touched but in a way much less then Europe and the U.S. Asian economies suffered through the recession but not as much as elsewhere. And big banks were particularly hit hard through the crisis.
Another interesting tidbit – when you look at the top four trading centers in each of the three regions, you know that Europe will certainly be the largest, which it is with around 47% of the marketshare. But second place is Asia (20%) and the Americas are third (19.7%). The gap between numbers one and four in Asia is 4.4 percentage points. But it is 17.6 percentage points in the Americas. The U.S. is the second biggest player but it drops significantly after that – Canada comes in number two in the region with a 1.2% market share. Mexico and Brazil each have an 0.3% share.
Posted by Gren Manuel
on May 06, 2010
, United Kingdom
It’s about 1130pm here in London – time to head into the office for many currency traders and traders in gilts, the U.K. government bonds.
That’s because we’re about the start the ritual of UK gilts and currency markets being open overnight during the counting of votes for a U.K. general election, as Britons find out whether Labour’s Gordon Brown has to hand the keys to Number 10 Downing Street to his Conservative rival David Cameron.
You’ll see the overnight (well, overnight for Britons) markets coverage on our Newswire. The opening gilts comment that usually comes out at around 8am London time will come out at about 1am as LIFFE, the market that is the main trading venue for gilts futures, will open then.
It’s good news for the handful of places in London that offer pizza delivery overnight. But the reality is that not much trading gets done. Traders who have sat through previous vigils report that spreads are wide and it’s not easy to make money. After all, everyone else in the market is watching the same results coming through, it’s not easy to come up with a truly original trading strategy in these circumstances – and with wide spreads you need to be very sure that you’re right because quickly backing out of a trade is pricey.
Fund managers certainly aren’t going to be phoning big orders through either for the same reason.
In this environment with low liquidity small trades can make big moves. The real market verdict may have to wait until around 8am London time, when liquidity comes into the sterling market and gilts volumes rise.
However TV exit polls are predicting that no party will win. If no party emerges with a clear majority it could be days, not hours, before it’s clear who is running the U.K.
Posted by Gren Manuel
on March 16, 2010
, Consumer Finance
The U.K.’s biggest mortgage lender is wanting its money back.
Certainly that’s one possible message of the ads that appeared in the U.K. papers this morning from Lloyds TSB, a unit of Lloyds banking Group PLC, which has about a quarter of the U.K. mortgages on its books.
Lloyds is advertising that “Now’s a great time to reduce how much you owe on your mortgage” because of low interest rates. To help nudge homebuyers along it’s doubling the size of mortgage overpayments that can be made without incurring penalties on variable rate mortgages.