I’m a natural optimist at heart. The response from pharma and scientific communities to COVID-19 makes me humble and while we’ve obviously seen missteps in the dealing of the pandemic, the fact that we as human beings have identified the virus, created a vaccine, tested it and are in the position to roll it out within a year is frankly incredible.
I was also super excited by the Apple M1 chip release – it reportedly does 11 trillion operations per second! It was not long ago when we needed liquid helium (c. 270°C) cooled processors the size of a room to perform calculations at that speed, and not that far back when we needed liquid nitrogen (c. 90°C) cooled processors. Now, it seems, we can do it on our laptops! This growth in computer power is opening up a completely new opportunity for financial markets, AI, and our interactions with technology. We are in the middle of a revolution. Optimism works!
I’ve also got BUCKETS of positivity about the progress we’re making together at CurveGlobal Markets. Our open interest is up 50%, and we’ve had record volume days of nearly 200K lots (representing over 35%* of the Short sterling STIRS).
These are the obvious measures of success, but, internally we analyse much more, including passive fill rates, order book size, depth and most importantly width. What’s driving CurveGlobal Markets volumes is an increase in these “hidden” facts. These are the facts that matter, the facts that drive market engagement.
I want to thank the growing number of clients of CurveGlobal Markets for all this good news. It turns out that if you cut the cost of trading by having zero fees, deliver a strong market with masses of liquidity and volume, and have banks and non-bank FCMs connected along with the main ISVs, you can build a really interesting – and competitive – ecosystem.
Take a look at the number and quality of smart order routers available to split orders. We’ve got a number of brokers working orders in CurveGlobal Markets, both directly onto the Exchange and in the block market. Also, remember that you can do a block at the middle of the market if you’re axed.
It’s not easy achieving growth and promoting a new exchange when operating sales and purchasing forces remotely. The traction we have achieved “despite COVID” is a testament to the value of the Exchange (and the CurveGlobal team).
Lastly – it wouldn’t be a newsletter introduction without me banging on about LIBOR transition. CurveGlobal recently participated in LSEG’s Transitioning away from LIBOR week, which consisted of daily panels discussing the effects of the transition on the different areas of the Group. You can watch replays of each session here. Our session discussed futures trading risks and opportunities in a post-LIBOR world.
My challenge is to persuade you that, when it comes to migration from LIBOR to SONIA, you don’t need to keep the same exchange and clearing house, but can switch and use a leading clearing house with a comprehensive SONIA swaps offering. An exchange that’s cheaper for you and adds competition in the long run to markets. A genuine win-win.
I wish you all a healthy Christmas and holiday season. Stay well – I’ve just so much optimism for 2021!
*Notionally adjusted (CurveGlobal Markets has different sized contracts to other exchanges for some markets, so to compare like with like we adjust).