Euronext’s FX ADV drops below $20 billion in August

Pan-European exchange, Euronext announced an 8.2% drop in the average daily volume on its spot foreign exchange market. The ADV figure was $19.66 billion in August 2022, down from $21.4 billion in July.

From a year-over-year perspective, Euronext foreign exchange revenue increased 24% from the $15.8 billion reported in August 2021.

In terms of aggregate monthly turnover, Euronext FX reported $450 billion, which is slightly higher than the $452 billion that changed hands the previous month.

Following the boom in activity seen across major FX trading platforms in the first half of 2022, institutional ECNs were in a sea of ​​red for the past two months. Almost all of the institutional platforms recorded double-digit declines in their monthly volumes.

Euronext, which operates equity and derivatives markets in countries including France, the Netherlands and Belgium, also said its total derivatives transactions were 8.6% lower. The figure was reported at 11.8 million contracts per day in August, down from 12.9 million the previous month. It was also down -6.4% from 2021 revenue of 12.63 million contacts.

Founded as a joint venture by Swiss bank Credit Suisse and broker FXCM in 2012, Euronext FX (formerly FastMatch) provides an electronic currency trading platform primarily for institutional clients such as banks, asset managers assets and hedge funds. The Franco-Dutch foreign exchange operator’s FX unit operates an electronic communication network (ECN) for currency trading and has matching engines in New York, London, Tokyo and Singapore.

FastMatch was acquired by Euronext in 2017 as part of the exchange’s strategy to diversify its revenue and extend its proposition to an additional asset class.

Euronext, which operates the largest pan-European stock exchange, reported last month that its second-quarter revenue improved to a record 374.7 million euros, up 14% from a year earlier.

On the foreign exchange business front, Euronext reported average daily volume in its spot foreign exchange market at $23.6 billion for the second quarter of 2022, up 27% from $18.6 billion it a year ago. The spot foreign exchange division generated €7.3 million in revenue, compared to €5.7 million in the second quarter of 2021, reflecting higher trading volumes as foreign exchange markets experienced increased volatility throughout throughout the quarter.

The Euronext FX franchise disappointed expectations in 2021 that had already been boosted after the exchange saw record trading volumes that were more than double the figure it typically generated before the pandemic.

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