CLS Group Reports Flat FX Volumes for May 2020

Foreign exchange settlement provider CLS Group reported its operational metrics for May 2020, which dropped on a yearly basis, and in line with peers in the industry, executed trade volumes were also lower compared with the figures of the prior month.

The average daily traded volume submitted to CLS was 1.48 trillion in May 2020, down four percent month-over-month from 1.55 trillion the prior month and a record $2.19 trillion in March. Across a yearly timetable, the figure also reflected a drop by nine percent relative to May 2019’s figure of $1.62 trillion.

CLS reported swaps volumes at $1.02 trillion in May 2020, down from $1.08 trillion in April 2020, a fall of six percent month-over-month. Further, the figure was lower by a factor of nine percent year-over-year from $1.12 trillion a year ago.

The company said that the decline in forward volumes was the result of the lower outright forward volume of $363 billion at the end of May, representing a 36 percent drop compared to the end of April.

In terms of CLS’ spot FX volume, the group has reported the figure at $385 billion in May 2020, up one percent from $379 April but nearly halved relative to $707 billion in the March. The figure was however lower five percent over a yearly basis from the $403 billion set in the previous year.

The mixed performance was again pronounced across CLS forwards business, which yielded a figure of $74 billion last month, down -14 percent over a monthly basis, and also fell by 20 percent year-over-year from $92 billion in May 2019.

ECNs were also in a sea of red

CLS Group saw record volumes in March as investors flock to safe-haven currencies amid violent market swings on fears of a coronavirus-fueled global recession.

“Following a period of wide-scale volatility and increased trading activity during the initial phase of the COVID-19 pandemic, average daily traded volumes in CLSSettlement – our payment-versus-payment settlement service – have now stabilized at significantly lower volumes as compared to the same period last year. In May 2020, we saw traded volumes of USD1.48 trillion, representing a decline of 4.3% compared to April 2020, and a decline of 8.5% compared to May 2019,” said CLS’s Head of Information Services, Masami Johnstone.

In May, however, currency volumes declined at major institutional platforms as industry figures show the interest faded somewhat as investors reduced their exposure and the sheer weight of bets on policies eased.

FX institutional ECNs were also in a sea of red over the last two months following the boom in activity seen in March, with almost all major venues reported 50 percent drops in their monthly volumes.

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