CLS FX Turnover Drops in October Amid Subdued Volatility

CLS FX Turnover Drops in October Amid Subdued Volatility

November 16, 2020

Foreign exchange settlement provider CLS Group reported its operational metrics for October 2020, which dropped on a yearly basis, and in line with peers in the industry, executed trade volumes were also lower compared with the figures of the prior month.

The average daily traded volume submitted to CLS was $1.707 trillion in October 2020, down -4.4 percent month-over-month from $1.785 trillion the prior month. Across a yearly timetable, the figure also reflected a similar drop relative to October 2019’s figures.

Following a period of wide-scale volatility and increased trading activity during the initial phase of the COVID-19 pandemic, average daily traded volumes in CLSSettlement – a payment-versus-payment settlement service – have now stabilized at significantly lower volumes as compared to the same period last year.

CLS reported swaps volumes at $1.20 trillion in October 2020, down from $1.25 trillion in September 2020, a fall of four percent month-over-month. Further, the figure was lower by a factor of six percent year-over-year from $1.276 trillion a year ago.

In terms of CLS’ spot FX volume, the group has reported the figure at $389 billion in October 2020, down nine percent from $427 September. The figure was also lower six percent over a yearly basis from the $415 billion set in the previous year.

The mixed performance was again pronounced across CLS forwards business, which yielded a figure of $116 billion last month, up seven percent over a monthly basis, and also rose by 23 percent year-over-year from $94 billion in October 2019.

CLS Group saw a rebound in volumes in September as investors flocked again to safe-haven assets amid violent market swings of fears of a coronavirus-fueled global recession.

“After the surge in volume in September, daily traded volumes in October were subdued at USD1.71 trillion (-4.4%). Both FX spot and FX swap volumes declined compared to the previous month by 8.9% and 3.8%, respectively. The spot volume decline was notable for EURUSD, where there was a 13% decline in volumes compared to September. Overall, Forward volumes increased by 7.4% compared to the previous month and by 23.5% compared to October 2019,” said CLS’s Head of Information Services, Masami Johnstone.

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