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 24% in July. 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, July and August volumes are typically about 5-10% lower than average due to seasonal issues (i.e. summer vacations in the northern hemisphere), but volatility in July was also somewhat lower than May and June, which saw a 10% and 3% (respectively) increase in global FX volumes in the Retail FX Volume Index.
We should learn more when Forex ECNs such as ICAP, Hotspot FX, Thomson Reuters and FXall release July numbers in the coming days and weeks. Stay tuned…
For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.