EBS trading volumes hit record low; FX activity dips at Thomson Reuters

By:
Peter Garnham
Published on:

Trading activity at EBS, Icap’s electronic FX trading platform, resumed its slide in October, hitting a record low as Hurricane Sandy and depressed volatility weighed on volumes.

Average daily volume in FX spot was $92.6 billion last month, down 17% on September and 46% lower than in October 2011.

That is the lowest level of activity since Icap acquired EBS in 2006 and means average daily volumes on the trading platform have dropped by more than 60% since peaking at $253 billion in March 2008.

Since then, EBS has lost its position as the world’s largest FX trading venue to Thomson Reuters.

 EBS average daily volumes ($ billion)

 

Icap said despite the devastating impact of Hurricane Sandy, EBS platforms remained fully operational throughout October.

"Inevitably the closure of the US bond market and ensuing widespread disruption of New York’s financial district caused by the hurricane impacted volumes towards the end of the month," the firm said in a statement. "It is too early to gauge how long this disruption will continue."

The fall in volumes at EBS is in line with the decreased activity at other trading venues last month.

Thomson Reuters, which overtook EBS as the world’s biggest FX trading venue last November, reported average daily volumes fell to $120 billion on its main FX spot trading services – Thomson Reuters Dealing, Matching and Reuters Trading for FX – in October.

That was down 10% on September and 23% lower than October 2011.

 Thomson Reuters and EBS average daily volumes ($ billion)

 

Similarly, average daily volumes at FXall, the leading multi-dealer FX platform for non-financial corporates and asset managers that was acquired by Thomson Reuters in July, fell 10% month on month to $94 billion. Over the year, volumes at FXall were up 9%, however.

Meanwhile, notional average daily volumes at CME Group dropped 30% month on month and were down 23% year on year, for example.

Still, the drop in volumes at EBS is likely to put more pressure on the firm’s management team, which in September announced changes to the trading rules on its platform after a review by new chief executive Gil Mandelzis.

The review, which responded to client concerns over the activity of high-frequency trading systems on the platform, was warmly received by FX trading officials from leading banks. Thus far, however, the changes appear to have failed to arrest the decline in volumes at the venue.