With some fanfare, Thomson Reuters launched yuan trading on its FX matching platform on Monday after the relaxation of Chinese currency rules in July.
In a statement last Friday, Reuters said 1,200 banks subscribed to Matching and “the existing Matching community, which are also registered Hong Kong Monetary Authority authorised institutions, will be able to access and trade dollar/yuan, euro/yuan and yuan/yen pairs.”
It seemed a bit hard to believe that of the 1,200 banks, all of them were already authorised; we predicted that yuan trading this week might be slow, what with all that pesky registration with HKMA.
According to a Thomson Reuters spokesman: “This is very early days and with most authorised institutions being domiciled in Hong Kong, we expect the majority of market makers to be the large local banks and International banks who operate in Hong Kong.”
The most liquid pair is currently spot USD/CNY, although as liquidity and interest grows in these newly listed pairs, we expect volumes to increase in the other crosses listed, EUR/CNY and JPY/CNY.”
EBS launched yuan trading on Monday as well although they did not blow their trumpet until Wednesday. Perhaps they heard Reuters making a lot of noise and thought they should too.
When we asked how the week has been for yuan on EBS, Jeff Ward, head of Icap’s electronic broking in Asia, told us: “There is clearly great interest in China as the second largest economy in the world, and we are seeing an increasing demand from international companies looking to issue bonds and increase trade settlement in the yuan. So far we have about 15 counterparties signed up to CNH trading on EBS and we are pleased to be working with another 20 to help set them up.”
Icap say they plan to launch further pairs in the next few weeks, including EUR/CNY, JPY/CNY and HKD/CNY.
