FX algos and the weight of industry expectations
Algo usage may reach saturation point unless operators try something new, writes Matt Clarke of XTX Markets
Oaktree Capital’s Howard Marks wrote a wonderful memo on how investors should adjust their forecasts by considering what’s already priced in. He calls this “second-level thinking”. If you believe a company’s prospects are good but the market thinks they’re great then you should expect its stock price to fall, he advises. This is not an intuitive reaction for most of us.
Foreign exchange algos are currently a bit like that. There’s no question the outlook is extremely promising for this
More on Tech and data
How FX execution adapted to tariff turmoil
BestX analysis shows API trading surged, but ‘get done’ and RFQ trading was surprisingly light
Bank FX market-makers ramp up AI usage
Barclays applies tech to predictions, while HSBC and ING look at pricing accuracy
Fnality joins DLT-based PvP FX settlement service
Baton Systems and Osttra’s joint payment-versus-payment FX network adds central bank-backed settlement option
Banks seek to advance predictive pricing models
AI and machine learning-based tools could give FX desks the power to forecast currency movements
State Street’s interop play for FX
About six years ago, State Street partnered with Interop.io to tie together its GlobalLINK suite of platforms. How does this play into the “re-use” mantra?
New FX swap matching platform aims to bridge voice and e-trading
FXswapX seeks to electronify “the last bastion of voice trading” in the interdealer market
Adoption of standard FX reject code too slow – Schroders trader
Standardised codes aim to improve consistency and transparency around why trades are rejected
Mastering the millisecond market
Leveraging millisecond-level data could unlock FX trading opportunities, says LMAX Group’s Sundaram
