First indication that October was slow in the FX trading world.
CME Group, which runs the world's largest derivatives marketplace, announced that FX contract volumes (mainly Eurodollar futures contracts) in its system were down by 32% in October from September to an average of 702,000 contracts daily. October's volumes were also 23% below last year's October levels, and also represents CME's slowest month for FX since August 2009.
While CME's reported volumes are futures contracts, they typically are a good predictor of retail / spot volumes as well. Those markets are interconnected, and are typically driven by the same catalyst -- namely volatility.
In the LeapRate Retail FX Volume Index, sponsored by Leverate, September FX volumes were up 7% globally following a (very) slow summer. But unless CME's low October volumes end up being a poor predictor of activity in the spot FX world (they are rarely wrong), it looks like volumes are indeed back down. We should learn more when Forex ECNs such as ICAP, Hotspot FX, and Thomson Reuters release August numbers in the coming days and weeks Stay tuned...
For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.