EBS the FX ECN platform owned by ICAP saw daily FX volumes rebound strongly in January, up 23% to $87.5bln/day from December’s multi-year low of $71bln/day, although still some -38.1% lower than a year ago.
In a conference call with Analysts, ICAP CEO, Michael Spencer also spoke about the new relationship based disclosed liquidity service called EBS Direct, which is now live with some 200 banks (made up of liquidity providers and price takers).
The service is delivered across the same technology as the EBS markets anonymous matching platform, but provides liquidity to price taking banks on a disclosed named basis. Although the current volumes are still small, they are growing at a strong rate, having been averaging under $500mln/day in November, by January they were averaging $2bln/day, with some days showing volumes of over $3bln/day. EBSDirect has launched a precious metals service.
Although currently only 2% of total EBS volumes, two interesting points were made on the call with regard to EBS Direct:
1. Not seen as cannibalizing EBS Markets, but delivering net new volume for EBS
2. Over time EBSDirect could grow to be as big, if not bigger than EBS Markets
Both comments make sense, as FX is a relationship game, and delivering liquidity to price takers on a disclosed basis is better for both the liquidity provider (LP) who can tailor pricing accordingly, and for the liquidity taker who receives deeper liquidity and more consistent pricing based on their relationship with the LPs.
On EBS Markets, volumes in major G7 pairs remained depressed, whilst there was record activity levels in Emerging Markets and NDF pairs in January. See here previous coverage on FX ECNs.
EBS Daily FX volumes fro Jan 2014 (includes EBS Markets and EBS Direct)
Press conference here: analyst conf call, and press release
Reuters Matching & FXall report FX volumes later this week.
