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Now You See It... Understanding Sterling’s Flash Crash On October 7, Cable flash crashed in early Asian trading, leading to chaos in the market and an official investigation into events surrounding the move. Colin Lambert takes a look at what happened. A few minutes into October 7 UK time, at 12.07.03am to where there are grounds to believe that the transaction is be precise, Cable traded through 1.2600 having fallen 30 points in the previous minute. Just 23 seconds later it traded below 1.2200 and 45 seconds later it had traded at 1.1378 on one platform. Just two minutes later the market was trading back above 1.2100 and just 10 minutes after the initial move, Cable was trading above 1.2400. The market had “flash crashed”.
Few Surprises in Latest BIS Figures So the latest Bank for International Settlements (BIS) Triennial Central Bank Survey is out and, as Profit & Loss previously reported, the headline figure is that the FX market has contracted in size from $5.3 trillion to $5.1 trillion traded per day over the past three years. This news seems to have caught very few people by surprise, however the survey shows spot foreign exchange volumes are lower while FX swaps activity has grown considerably, especially in Asian centres and in the yen.
What Can the Brexit Vote Teach Us About FX Liquidity? The illiquidity in the market following the Swiss National Bank’s (SNB) decision to drop its peg to the euro raised numerous questions about how liquidity functions in the modern FX market, and particularly how it functions in times of ...
RMB Included in the SDR Basket: Symbolic or Significant? The big news this week was the announcement by the International Monetary Fund (IMF) that the Chinese renminbi will be included in its Special Drawing Rights (SDR) basket.  But is this decision purely symbolic or does it have broader implications ...
Goldman Says Go Long USD Against EUR, JPY in 2016 Goldman Sachs has released the first six of its ten top trades for 2016, including two FX recommendations, against an “unusually uncertain” backdrop of Fed rate hikes, ECB easing and volatile oil and metal prices. The bank says that while the ...
AUD: The Ghosts of Overshoots Past AUD: The Ghosts of Overshoots Past The AUD has sailed through levels which would be considered fair relative to domestic economic fundamentals and has begun to provide a stimulatory tailwind to the non-mining economy. Our analysis suggests that this is ...
CNY: Finding stability in instability By Callum Henderson, FICC Research, Standard Chartered Bank and Eddie Cheung, FICC Research, Standard Chartered Bank (HK) Limited In the wake of the 11 August ‘adjustment’ to the USD/CNY fixing mechanism, markets have focused on the likelihood of a major ...
Fed Decides Against September Rates Hike The US Federal Reserve Bank has decided not to raise key interest rates in September, with chairwoman Janet Yellen citing concerns about a global economic slowdown, low inflation in the US and volatile stock markets as the reason for this ...
FX Liquidity: Here Today, Gone Tomorrow? A new report from academics based in Switzerland argues that FX liquidity often evaporates in times of market distress, adding to the recent ongoing debate on this issue. Profit & Loss editor, Colin Lambert, noted in his recent column that there ...
A New Paradigm for Prime Services

17:00 September 14th 2015 in Analysis, Markets

A New Paradigm for Prime Services

As many prime brokers continue to withdraw their services from smaller clients, the prime-of-primes are seeing more business come their way. Galen Stops looks at the implications of this trend for the FX market and asks whether it is a ...