Technology: unlocking the power of FX Market Data >>>
the market today that is off the shelf given the relative immaturity of the space. But the picture is changing.
Res says: “Tis is an area traditionally dominated by the likes of Reuters Triarch, but we see a good deal of new competitors in the area. Most of them stem from a technical proposition (low latency messaging) and have built vertical solutions to some extent around the financial industry. Tey offer standard adapters to FIX or leading data providers and offer messaging services and solutions into a proprietary application architecture.”
He adds: “Not many of them have an out-of-the-box solution that manages subscriptions, channels and have instruments defined, but we expect that it’s only a matter of time before they do.” Here Nexaweb’s DataEngine provides for these capabilities, be it that they are typically deployed in a sales trading environment. Tey specialise in broadcasting rather than guaranteed delivery in a closed and controlled network.
Tibbetts says that while StreamBase are seeing the latest monitoring tools from the likes of Coralix and Corvil at trade shows, he cannot say that “any one solution is being preferred.”
Bart Res Widening FX data content sets
In relation to how FX data content sets have widened to include a wider choice of packaged data types (real- time series, historical, etc.) and delivery formats from both OTC and exchange-based sources, the jury is still somewhat out.
Tibbetts notes something of a “Two-Tier Model” for consumers of FX market. Te first category consists of passive consumers running an equities or a fixed- income desk, where it’s important they know what the FX rates/prices are to value trades, but are not focused on exactly on how much liquidity is available. Te second category typically comprises trading/ prop desks, where they are trying to write execution strategies in FX. For this group it’s important to understand how solid the rates are and where liquidity resides. But many of the consolidated data providers are focused on that first tier.
ACTIV Financial is one such firm bringing online FX data capabilities. But Tibbetts thinks it “remains to be seen how those [types of services] will be used and whether they’ll be used by trading desks or used for indicative pricing.” StreamBase, for example, has a partnership with Morningstar, who acquired UK-
“For client-servicing banks (distribution banks) the emphasis will not be on trade- and risk-related data as such, but on transparency for customers.”
based Tenfore Systems, which through its Tenforex service offers a source of real-time indicative pricing for foreign currencies.
Trenner points out: “If you want to know the historic or real-time data on €/$ trading, then one might think the most important inter-dealer market place for €:$ would be EBS. Terefore, that would be the most obvious place to start accumulating data. However, there’s substantial €:$ traded inter-dealer on the CME, at Hotspot, at Currenex, FXall and at many banks.”
Highlighting the fact that CME prices [in FX] are futures, whereas spot [FX] is spot, he adds: “A future has an implied spot with an implied interest rate calculation. And, if you want to compare the CME, which is what many people do, effectively you have to de-construct the CME data to compare it directly. With the CME being a very important source of liquidity, it pays to do that. But the reality is that there is considerable overlap in quotes.”
april 2011 e-FOREX | 79
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