Review of 2025: A topsy-turvy ride
Rollercoaster year for FX traders ends with G10 volatility and hedging flows back where they started Source link
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US insurers turn to short-dated FX forwards as notionals rise
US insurers turn to short-dated FX forwards as notionals rise – FX Markets Skip to main content End of drawer navigation content Counterparty Radar: Trades under three months make up nearly 60% of total positions, up from just a third in 2022 US insurers ramped up their use of short-dated FX forwards to manage currency
dont use 221225 – FX Markets
The crypto market has endured its share of sharp corrections, but the October 10 liquidation event, with nearly $19 billion erased in hours, marked an important turning point. The scale was historic, but the outcome was not the systemic breakdown that defined 2022. Instead, it was a real-time stress test that the market, broadly speaking,
Dealers warn of capital squeeze from increased FX hedging
A surge in uncollateralised foreign exchange forwards hedging from buy-side clients could put bank balance sheets under pressure, dealers warn. FX hedge ratios at asset managers and pension funds have not materially increased in 2025, despite the selloff in the US dollar in the second quarter. This may change, though, as narrowing interest rate differentials could
Quants tell FX dealers how to make the most of passive liquidity
Hedge funds are being given new ways to act as indirect liquidity providers in FX markets by placing passive resting orders against banks’ internal liquidity pools. How dealers should then make use of such orders, though, presents a complicated question. In a December paper, quants at HSBC and Imperial College London give an answer. The group worked out
Dealer views mixed over future of profitable EM FX carry trade
If the first half of 2025’s currency markets were characterised by record-breaking months of volumes and volatility, the back half of the year has been defined by a range-bound US dollar, promoting an environment for carry trades in emerging markets (EM), particularly in Latin America, to take off. Positioning in these strategies normally builds when
BIS points to ‘structural transformations’ in markets
The Bank for International Settlements’ quarterly review, published today (December 8) finds market exuberance amid corporate bankruptcies, and gold losing its ‘safe haven’ status as its surging price correlates with that of equities. Hyun Song Shin, who leads economic work at the BIS, told a press conference on December 6: “What we definitely can say quite
Banks scale back short-dated FX swaps trading, BIS finds
Interbank foreign exchange swaps trading has stagnated since 2022, as banks turn to the forwards market for their short-term liquidity needs, according to the Bank for International Settlements. FX swaps remain the largest segment of the FX market with average turnover of $4 trillion a day as of April 2025, a rise of 6% since
MAS official flags risks in Asia’s path to T+1 settlement
A senior Singapore regulator has warned that Asia’s likely move to T+1 settlement must be carefully managed to avoid introducing new risks into the region’s financial infrastructure. Ian Chung, executive director of the markets, infrastructures and intermediaries department at the Monetary Authority of Singapore, said he saw a move to T+1 settlement as inevitable for
CME futures outage caused FX spot pricing problems
CME futures outage caused FX spot pricing problems – FX Markets Skip to main content End of drawer navigation content At least one non-bank was forced to pull prices, and NDFs also affected The absence of pricing information from CME’s futures contracts during the outage on November 28 caused major problems for some foreign exchange
From market-makers to matcha: 10 years on an FX desk
I’ve just achieved – or endured? – the milestone of 10 years on an institutional FX trading desk. Either way, it feels like the right moment for a little reflection. Let’s start with an assumption: this morning I tapped in with my contactless card for the Elizabeth line, sipped canned matcha, scrolled TikTok and started
BofA, Reactive Markets pick up Risk.net awards
BofA, Reactive Markets pick up Risk.net awards – FX Markets Skip to main content End of drawer navigation content US bank wins FX house for performance during Liberation Day, while Reactive Markets takes OTC trading platform prize Bank of America picked up the currency derivatives house of the year award in sister publication Risk.net’s annual
Inside Safran’s $54bn FX options book
The largest counterparties for complex foreign exchange options are typically the leading multi-strategy and macro hedge funds that place big bets on the direction of currency pairs. But there is one corporate whose use of FX options is so extensive that it is connected to most of the top dealers on the Street, regularly buying
NatWest retunes options tool to create, not hedge
Like many dealers, NatWest has for years had a tool that automatically trades in the underlying spot or forwards markets to replicate and hedge its foreign exchange options sensitivities. Recently, though, the bank has given clients access to this tool – not to hedge their options but to replicate them in spot for those such
Market-makers near limit for lira carry-based options trades
Dealers might be nearing their capacity for Turkish lira options-based carry trades, as liquidity pressures, market risk and unwind concerns begin to constrain the amount of new trading they can support. The lira carry trade has been a favoured strategy among hedge funds and institutional investors this year, owing to the whopping 40% carry on
Internalisation trend driving FX market opacity to new highs
The increasing shift of foreign exchange spot market volumes into liquidity providers’ internalisation engines has made real-time visibility into the true magnitude of volumes traded in the market more and more difficult. During intense periods of high volatility, such as April’s tariff turmoil, liquidity providers noted that the flows they internally match within their client franchises
Nomura eyes FRTB models expansion for FX desks
Nomura eyes FRTB models expansion for FX desks – FX Markets Skip to main content End of drawer navigation content With rates desks all now on FRTB internal models, markets head says FX is next Nomura is looking to gain approval to use internal models to calculate its foreign exchange desks’ capital requirements under new