Singapore Exchange sees 4 million FX futures contracts in November

Singapore Exchange (SGX) announced recently that its forex futures saw a new all-time high in November, skyrocketing by 21% on a month-to-month basis after seeing 3.3 million contracts in October. Asia’s leading securities and derivatives marketplace recorded as many as 4 million contracts last month, which also marks a 104% increase on a year-over-year (YoY) basis.

SGX notes a massive surge in November 2022 trading data

The new figures were published this Monday, December 12th, as part of the SGX Group’s market statistics for November 2022. As mentioned, this is the new all-time high for the company, which exceeded the previous record by quite a bit. The last recorded ATH was marked in September of this year when SGX saw 3.43 million contracts in a single month.

The SGX Group explained that hedging activity on the platform’s OTC forex futures marketplace, known as SGX FX, went up following the United States’ decision to boost interest rates. As the dollar weakened, forex traders started buying futures massively, affecting the volume of the SGX INR/USD futures improved by 20% on a monthly basis and 81% on a yearly basis, reaching 1.8 million contracts after previously seeing 1.5 million in October.

Apart from that, the INR/USD futures contracts saw a record average daily turnover after reaching 83,700 contracts last month. Meanwhile, the KRW/USD futures also saw a significant increase, hitting $3.3 billion in volume, which is a new monthly high, according to the exchange

Record FX trading made the derivatives volume spike up, which happened around the same time when optimism regarding Asian economies surged, while the US Fed started hinting at slowing down the pace of the interest rate hikes. From the investors’ perspective, everything suggested that significant changes are coming in the forex market and that this is the time to get involved.

Interesting figures involving SGX derivatives

In the meantime, the total derivatives, including forex, commodities, and equity, that were traded on Singapore Exchange in November saw an 8% increase compared to the situation in October and a 30% increase compared to the same period in 2021. Derivatives reached 23.7 million contracts, shooting up by 1.7 million from October’s 22m.

When it comes to derivatives’ daily average volume (DDAV), however, it saw an 8% drop, hitting 1.1 million contracts. For comparison, the figure seen in October was 1.2 million. However, on an annual level, the volume actually climbed by 27%.

Another thing that may have contributed to the investors’ change in attitude was China’s decision to gradually reopen and expand the government’s support for its property sector. This fanned risk-on sentiment regarding equities in Asia, including commodities and currencies alike.