CME Group reports a growth in FX Link as spot FX drops
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CME Group has published its trading data for April 2023. The data shows that the total volumes for spot foreign exchange traded on the Electronic Broking Services (EBS) hit $52.9 billion. However, the spot FX volumes slumped.
CME’s FX Link gains as spot FX volumes drop
EBS is a wholesale electronic trading platform for the CME Group. The platform provides access to forex trading services with market-making banks. The total volume of spot FX traded on this platform reached $52.9 billion last month.
On the other hand, the trading activities in the spot FX market among institutional investors dropped last month across regions. The data published by Cboe FX, 360T, FXSpotStream, and Click 365 shows that spot FX volumes dropped in April. Russia’s largest exchange MOEX also reported a 0% month-over-month decline in spot FX trading volumes.
While CME Group saw a similar drop in its spot FX market, the average daily volume for FX Link, the spot FX basis spreads for CME, increased by 32% last month compared to April 2022. However, CME Group did not reveal the value of these volumes. In March, CME’s FX Link ADV increased by 34% year-over-year.
The global head of EBS at CME, Jeff Ward, commented on these financial results saying, “In general, April volatilities in G3 pairs and CNH were all at or near 12-month low points during April, which not only impacts market volumes as a whole but can have a heightened impact on inter-bank centric platforms and central limit order book volumes.”
Ward also said that CME saw increased adoption of EBS Direct Forwards in April. EBS Direct Forwards is a platform that offers optimal execution and management for FX forward risk. Over the past month, the platform’s ADV has increased by 61% compared to the same period last year.
CME Group reported $1.4 billion in revenues during the first quarter of 2023. The revenue was the second-highest quarterly figure released by the company. The increase came as participants in the global market looked to manage risks across different asset classes during the first three months of 2023.
The latest financial results show that CME Group reported a 5% year-to-date growth in trades for FX futures and options in April. The trading platform also noted that the year-to-date open interest for FX futures increased by 5% compared to the same period in 2022.
CME Group reports an ADV of 19.8M contracts in April
CME also reported an ADV of 19.8 million contracts at the end of April. The ADV was the second-highest April ADV that the company has ever reported. The increase in ADV comes amid notable gains in options, commodities, and cryptocurrencies.
CME Group reached the second-highest ADV levels in March, with the daily average volume increasing by 24% to 30.3 million contracts. During the first quarter, the exchange reported a 4% increase in ADV to 26.9 million contracts, the second-highest quarterly volume the company has ever reported.
