Worries mount over year-end liquidity conditions

By some measures, liquidity already halved this year, banks say

jeremy-smart
Jeremy Smart, RBS

Foreign exchange markets could see increasingly difficult liquidity conditions going into the year end, which might make squaring up expensive for buy-side market participants and, if risk factors materialise, make it impossible to exit positions, warn sell-side market-makers.

Liquidity conditions have been deteriorating this year across fixed-income markets, with one head of trading estimating FX liquidity halved since last year, and spreads in interbank markets have been widening for the past

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