The article can originally be found here: http://bgifx.co/FF_FOMC

Today marks a very important day in the fiscal calendar, and one of great significance for traders of all denominations including those in the retail segment, those at the interbank epicenter in London’s square mile, and the professional trading desks of Chicago and New York. Today is the day when Janet Yellen makes her decision on US interest rates, and will announce her plans to an audience which is waiting with great anticipation.  

The announcement during which the Federal Open Markets Committee (FOMC) will release its statement, will take place at 14.00 EST (New York) which is 19.00 in London. It has been generally considered by many market analysts in the advent of today’s forthcoming announcement that Ms. Yellen will indeed increase the interest rates once again, following a rate hike that already took place in September.

Ryan Nettles of Swissquote gives his perspective to FinanceFeeds

Who cares about interest rate changes? - Actually, pretty much everybody A usually far from interesting subject, interest rate changes have become a moot point among traders. So important are US interest rates with regard to criteria that is used by large companies to measure market confidence that the September rate hike was actually part of the reason why less large companies looked to issue IPOs in oder to become publicly listed during 2015.  

FinanceFeeds today spoke to Stephen Leahy, Chief Operating Officer at FXPRIMUS, who explained “It is well-known that this US Federal Reserve FOMC statement today is highly likely to raise rates, and the focus will be on the wording of the accompanying statement as to the potential course of action of any future rate hikes” said Mr. Leahy. “For those who want great analysis of the situation, please see this research piece from Marshall Gittler yesterday” advised Mr. Leahy.

FXPRIMUS COO Stephen Leahy with Andrew Saks-McLeod in Boston, Massachusetts. Fed hike likely today?

 

“What will be interesting to me is the amount of market volatility in the immediate aftermath of the decision and statement. We expect lower liquidity in exotic currency pairs towards end of year” - Stephen Leahy, COO, FXPRIMUS.

“But we have been seeing massive inter-day moves in the major pairs lately. That means a combo of thin liquidity and/or huge year-end positioning by the largest of trading houses. With the retail FX industry so dependent on volatility, I am looking to see how volatile this event is as foreshadowing of the last few weeks of the year” concluded Mr. Leahy. Ryan Nettles, Director at Swissquote explained to FinanceFeeds “The USD crosses are currently trading in a tight range ahead of the FOMC rate decision today.  With the USD weakening about 4% after the ECB interest rate news two weeks ago, we are expecting a rate increase by the FOMC which should reverse the some of the weakness the USD had earlier.”  When the Federal Reserve released its third quarter GDP figures which recorded a rise of only 1.5%, Michael Hewson, Chief Market Strategist at CMC Markets said “I think the statement by the Federal Reserve was more about messaging than anything else. I think they wanted to keep the option of a December rate rise on the table even though the data currently suggests that they may not do anything.”

With regard to the October statement by the Federal Reserve, Mr. Hewson noted that the Federal Reserve implemented a timing cycle that would make it difficult for them to raise rates in December when that meeting comes around because there has been a significant sell off in the Euro and a tightening or raising in bond yields.” Indeed, with this measured view at the beginning of the last quarter, the jury is most certainly still out.

Image courtesy of Bloomberg

Jansen Khoo, Head of Risk and Prime Services at Blackwell Global told FinanceFeeds today “Our desk view is that the rate hike tonight is certain and priced in. However, what will drive the dollar after the release would be the pace that Fed will hike in 2016.” Let’s see what the multi-asset proponents make of this should the hike have significant effect on the currency markets as this comes at a time when a great many retail FX firms are rallying to go multi-asset, yet have not yet got the ability to price underlying assets or gain clearing facilities for CFDs or other futures contracts which do not involve FX and can be traded electronically via a retail platform. Interesting times ahead….

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The article can originally be found here: http://bgifx.co/1N6BAyO

Neo & Partners Global (NPG), a Singapore firm that specializes in offering electronic trading solutions and recent creator of Asia’s first Trading-Atrium, announced a collaboration with Blackwell Global to establish its Prime of Prime FX Liquidity Pool market access capability as part of NPG’s ecosystem. The firm explains that hedge funds, family offices, proprietary trading firms, commodity trading advisors and overseas companies are using the Trading-Atrium to set up or strengthen their e-FX trading capabilities not just from Singapore but globally as well. NPG has also partnered with hardware technology leaders to offer low latency for multi-asset class trading. Mr. Michael Chai, Chief Executive Officer of Blackwell Global, said, “We fully support Neo & Partners Global and their introduction of an innovative trading approach, and in illustrating that our FX solutions offer world class trading facilities, providing enhanced FX liquidity and highly efficient trading opportunities to institutional clients globally, including Money Managers and Proprietary Trading Firms.”

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The article can originally be found here: http://bgifx.co/1gdKuwR

Cutting Edge Approach Enchance liquidity and highly efficient options

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The article can originally be found here: http://bgifx.co/1ANuW73

Nigeria has caught the interest of many retail FX companies recently as an emerging market with an eager potential client base. Blackwell Global’s Research Analyst Alex Gurr details the landscape surrounding Nigeria’s sovereign currency Africa’s emerging markets have caught the eye of many FX industry participants over recent months. In this LeapRate Guest Editorial, Alex Gurr, Research Analyst at Blackwell Global, details the way ahead for Nigeria’s volatile sovereign currency. Currency movements have a massive impact on the state of all major economies around the globe, and the effects are felt in the largest to the smallest of countries. Is it something governments and countries can control? Yes, it’s possible, but it comes at a cost and generally even the largest governments are unlikely to ever try and defend a currency as the market can quickly turn in the face of weakness. In the case of Nigeria and after yesterday’s central bank ruling, it may be a case of investors at home stuck with a currency that is likely to devalue further. Recently, the central bank was quoted as saying “Banks have to sell all dollars they buy from the market, not to keep them until the following day”. This seems a highly irregular ploy from the central bank, but one also has to consider that the central bank has hiked interest rates to 13% in an effort to stem the bleeding of the Naira. Historically speaking, raising interest rates rapidly does little to stop a currency from devaluing. In fact, markets may take this as a sign of weakness and apply more pressure in the interbank markets. Nigeria is Africa’s largest economy, but it also has a massive dependence on oil. The impact of recent sharp drops in oil has had a catastrophic effect on the currency and the tax receipts of Nigeria, with sharp budget cuts of at least 8% forecast in 2015 as a result of the drops. Overall, oil accounts for 35% of GDP, and when it has dropped almost 50% this year alone, the impact it has on Nigeria is dire and the long term effect it’s going to have on any currency tied to oil will be drastic. The chart above shows the impact that a drop in oil can have. Canada, which is diversified in its services and primary sector, has taken a small beating on the charts, while other major export nations like Brazil and Nigeria, both heavily dependant on oil exports, have taken a beating from the currency markets and suffered from volatility. With the general expectation for an ever drop in oil, these currencies will continue to be affected deeply. However, trading FX or following FX markets allows for smart money thinking. A falling currency presents itself as an opportunity and not a calamity as many would say during this period. At present, the Naira has fallen over 12% against the USD. There are two options in the FX market: you can hedge by buying the USD on margin (a move requiring very little capital outlay), or alternatively look to short oil contracts. Both strategies provide some sort of security at present in the Nigerian market at a time of uncertainty. With the drop in oil, the economy of Nigeria is likely to reel from it for some time and it will take a jump in prices again to stave off any further devaluation – something that OPEC seems to care little for at the moment. This is a Guest Editorial by Alex Gurr, Research Analyst at Blackwell Global.

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