Lewis William, Senior Financial Analyst, Triangle Profits
Dealers Shake Off FX Concerns Amid T+1 Risk
As the financial industry adapts to the T+1 settlement cycle, predictions of increased settlement risk and late-day trading disruptions have not materialized. Dealers have successfully mitigated these potential issues, showcasing resilience and adaptability.
Key Points:
- Settlement Cycle Shift: T+1 transition
- Predicted Risks: Increased settlement risk, trading disruptions
- Outcome: Effective risk management by dealers
Pimco’s Dominance in FX Forwards
Pimco made significant strides in Q1, accounting for nearly 60% of all notional values added by mutual funds in FX forwards trades. This aggressive strategy highlights Pimco’s influential position in the market.
Key Points:
- Q1 Performance: Dominated FX forwards
- Market Impact: Nearly 60% of mutual fund notional values
- Strategy: Aggressive positioning
BNPP and BofA Top Dealer Rankings
BNP Paribas and Bank of America have emerged as the top dealers in the latest FX Markets Dealer Rankings, excelling with US mutual funds. Morgan Stanley remains the preferred counterparty for life insurers, maintaining its strong market presence.
Key Points:
- Top Dealers: BNP Paribas, Bank of America
- Client Segments: US mutual funds, life insurers
- Morgan Stanley: Leading counterparty for insurers
Korea FX Reforms Drive E-Trading Surge
South Korea’s recent FX market reforms, which open onshore trading to foreign firms, are expected to significantly boost electronic trading volumes. This move aims to enhance market liquidity and attract international participation.
Key Points:
- Reforms: Open onshore FX market to foreign firms
- Impact: Surge in electronic trading
- Objective: Increased liquidity, international participation
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