Our monthly FX insights
Hello from FX Markets,
This month, LCH ForexClear looks to kick-start clearing of FX forwards, market-makers review new macroeconomic effects on FX options pricing, and T+1 prompt asset managers to automate FX trades.
Finally time for deliverable FX clearing?
LCH has started an ambitious programme to kick-start clearing of deliverable FX forwards. Branded as ‘Smart Clearing’, it enables banks to selectively clear their FX forwards trades via LCH ForexClear. The clearing house predicts significant savings for banks using the service – claiming it could generate average underlying P&L savings of $18 million per year.
FX options traders widen event risk spectrum
Options desks typically apply weights to a small number of central bank events or economic data releases when pricing trades. However, some market-makers are now looking at a wider spectrum of events, including housing metrics, corporate profits, and consumer price indexes.
Compressed settlement timelines to boost FX automation
The impending transition to T+1 settlement in the US presents a logistical hurdle for non-US buy-side firms. To meet this challenge, custody banks say non-US clients are looking to automate their FX trades outside of US trading hours to help meet tighter cut-off times for settling the transactions.
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Key dates for your diary
e-FX Awards Dinner, July 2024
Join us this summer in London to recognise the dedication, skill and creativity that market participants pour into the ever-changing world of e-FX trading.
With some brand new categories and a talented panel of judges, find out who is raising the bar in the industry.
Entries are open now and close April 30.
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