360T Podcast Series

This episode begins with Michael Angjeli, Treasury Manager, FX, at Wise, discussing how the goals and objectives of FX trading and risk management within treasury organisations shape and dictate execution decisions. He then explains how Wise has adapted its hedging strategies in response to market volatility, adopting a more dynamic approach to adjusting hedge ratios, particularly for emerging market currencies. Angjeli also highlights the proactive steps Wise has taken to leverage technology and robust analytics to achieve cost reductions, efficiency gains, consistent pricing, and minimised operational risk in FX trading.

In this episode of the 360T podcast, Allan Guild, Director at Hilltop Walk Consulting, shares insights from his role chairing the recent TradeTech FX USA conference. These include how rising geopolitical uncertainty has heightened the focus on FX as an asset class, the ever-changing liquidity landscape and the growing importance of data-driven decision-making on the buy side. Guild also discusses the increasing role of automation and the evolution of FX algo trading, the challenges of integrating new technology into existing infrastructures, and the competitive pressures driving buy-side firms to accept change.

Once again, Colin Lambert, Co-Founder of The Full FX, joins the podcast to make a series of predictions for the year ahead. But first we review and, for the first time ever, score his predictions from 2024 – has Lambert been looking into a crystal ball or a snow globe? Looking ahead to 2025, Lambert predicts that volatility will drive trading volumes up significantly across the industry, that regulators in the UK and Europe will get serious about enforcing rules for trading platforms and that the latest wave of non-bank market makers to enter the FX will find it a challenging marketplace. He also makes the case that FX options trading activity will continue shifting towards electronic trading platforms, sees currency CTAs heading for a banner year and suspects that debates around pre-hedging will rumble on with no real conclusion in sight. And, of course, Lambert picks out his infamous Trade of the Year!

Our 50th episode features Mark Mulholland from Fidelity International discussing his recent deep-dive analysis on FX trade rejections, and their impact on execution quality and outcomes. Despite the topic of last look grabbing industry headlines in recent years, Mulholland explains that other often overlooked issues — such as static data — proved to be a bigger driver of reject rates for his firm and highlights the challenges posed by a lack of data standarisation across the FX industry. He also outlines how his analysis has helped Fidelity International realise a significant drop in the number of FX trade reject rates and points to an opportunity for sell-side firms to provide better pricing to clients and, ultimately, improve market efficiency. 

Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, breaks down some of the key themes and trends impacting the FX market. He discusses the fallout of the recent unwinding of the yen carry trade on corporations, explains why currency markets don't always follow a pattern of cause-and-effect and argues that the US dollar will remain at the centre of financial markets - but not necessarily for the reasons that many people assume. Chandler also looks ahead to a potential rate cut by the US Federal Reserve Bank and a divisive presidential election, making the case that the dollar is set for a cyclical downturn.

In this episode Nathan Vurgest, Director of Trading at Record Financial Group, talks in-depth about how data is changing and shaping FX trading desks. He outlines the challenges facing buy-side firms as they try to access and make sense of all the trade data which they generate internally, explains how traders are evolving to provide more value beyond just FX execution and highlights that this broadening role introduces new complexities around effectively measuring best execution.

As is something of a tradition on the 360T podcast now, Colin Lambert, Co-Founder of The Full FX, joins as a guest to review the accuracy of his 2023 predictions and make a series of new ones for the year ahead. Lambert receives some gentle criticism for making "obvious" predictions last year, which perhaps prompted him to be more daring this year as his 2024 predictions encompass cybersecurity threats, why the shift to T+1 settlement might only be the tip of the iceberg, flash crashes in the FX market, a good year for discretionary trading, cryptocurrency adoptions and more! And although Lambert concedes he is in danger of becoming a reverse indicator with his infamous Trade of the Year, he nevertheless makes his pick for 2024.

This episode features two experts, Tobias Rank from Eurex and David Holcome from 360T, taking a deep dive into why more FX market participants are turning towards Exchange for Physical (EFP) products, and how the listed FX marketplace is likely to evolve in the future. The pair also tackle questions about how regulations are changing the economics of OTC trading, whether there is really a demand to support more listed FX trading and the shortcomings of OTC FX clearing.Additional resources about EFPs:FX EFPs – the best of two worldsFX EFP tutorial – mechanics and use cases

FX is a highly liquid market, with many different currencies to trade that are constantly moving against one another, so why don't investors typically think about this asset class when building out their portfolios? In this episode Van Luu, Global Head of Solutions Strategy, Fixed Income and FX at Russell Investments, addresses this question and explains the important role that currency strategies can play in helping investors to diversify a multi-asset portfolio. In particular, he talks about how a currency strategy which leverages three factors — Carry, Value and Trend — can offer low (or even negative) correlation to traditional assets, providing a boost to multi-asset portfolios while generating little or no additional risk.

The FX Global Code of Conduct has been a major and ongoing industry initiative since 2015, but it's been well documented that buy-side adoption of the Code has lagged behind other segments of the marketplace.  In this episode Dagmara Fijalkowski, head of global fixed income and currencies at RBC GAM, talks about why buy-side adoption of the Code has been slow thus far, what possible steps could be taken to accelerate it and how the Code has brought tangible benefits to both RBC GAM specifically, and the FX industry more broadly.

While the consequences of geopolitical events are felt in the currency markets first, in the long-term it is fundamentals that continue to drive this asset class, says Adrian Lee, the President and CIO of Adrian Lee & Partners, in this episode. He discusses emerging trends across both, as well as identifying the fault lines in the global economy where we might see the next big risk factors emerge from. Lee also discusses how and why investor attitudes towards currency management are changing, helps to get beyond some of the jargon surrounding these services and makes the case for active over passive currency management.

How is artificial intelligence (AI) likely to change the way that financial products, including FX, are traded? This is the key question addressed by Saeed Amen, co-founder of Turnleaf Analytics, in the wake of the recent hype around this technology sparked by new tools such as ChatGTP. Amen outlines some of his own experiments with AI chatbots, discusses the importance of having access to high quality data in order to train AI models and helps to parse through some of the terminology and misconceptions surrounding this technology. He also addresses how AI will change the role of the human trader, predicting that the curation of trading activity and then providing a narrative around this will become increasingly important.

Colin Lambert, Co-Founder of the Full FX, joins 360T to review his 2022 predictions and is surprised to find that while he achieved mixed scores on the forecasts he claimed were “certain” to happen, his “wildcard” ones fared much better. Perhaps this is a sign of what an unpredictable year it was? Looking ahead, Lambert picks out the key themes which he thinks will define the FX industry in 2023 and once again makes a series of predictions for the year ahead. And finally, completely undaunted by the poor results of previous years, he once again announces his Trade of the Year.

In our latest podcast episode Ivan Asensio from Silicon Valley Bank discusses two recent papers, which he co-authored looking at the impact of FX on firms looking to raise equity and those preparing for an IPO. The results of both, he argues, help to make the case that FX should be viewed as a strategic rather than operational concern within organisations.Asensio also talks about how the marketplace has shifted to “a new paradigm” where controlling costs has replaced growth as the primary focus, and claims that this makes effective FX management more important than ever.

We are in a period of economic uncertainty with rising inflation, divergent central bank policies, supply chain constraints and geopolitical turmoil fueled by a land war in Europe.Against this backdrop how should investors be positioning themselves and what should we expect in the currency markets? These are amongst the questions that Pedro Jobim from Brazilian hedge fund Legacy Capital addresses in our latest episode.Jobim also provides his economic outlook for Brazil ahead of what is shaping up to be a potentially contentious presidential election there later this year. 

The Investment Association (IA), which represents UK-based investment firms managing £9.4 trillion of assets globally, recently published a briefing paper calling for reform on FX sub-custodian timestamping. In this episode Hugo Gordon from the IA explains why this issue, which might initially seem to be something of a niche concern, can have significant ramifications for investment managers and outlines steps which can be taken by both buy-side and sell-side firms to help resolve it.Gordon also discusses the FX Global Code of Conduct, highlighting some of the factors which might have slowed buy-side adoption previously and areas where increased clarity has been welcomed by the IA's membership.

In this episode Eoin Fahy from KBI Global Investors provides a buy-side perspective on ESG investing, arguing that applying these principles to investment decisions actually helps rather than hinders the overall performance of portfolios. He also explains how the considerations around ESG investing have grown substantially more sophisticated in recent years as its popularity has exploded and ponders how these principles will ultimately be applied to the FX market.

ESG: What Isn't Being Talked AboutESG has, to put it mildly, been a hot topic within financial services in recent years, but in our latest podcast episode Duncan Higgins from Sustainable Trading argues that while much of the focus has been on products or processes that are ESG-friendly there are myriad of ways that operational processes could also be improved on this front. He goes on to talk about the need to define ESG best practices for the industry, why change needs to be driven from both the top-down and the bottom-up and how firms can avoid initiatives in this area becoming simply “tick-box” marketing exercises.

Joining the podcast once again Colin Lambert ruminates on some of the most surprising developments in the FX industry during 2021 and picks out what he believes to be the most consequential news story of the past year. Looking ahead, he argues that the FX Swaps will continue to propel the overall marketplace towards growth in the upcoming BIS survey and makes a series of predictions — including some wildcards — about what to expect in 2022. 

FX automation has been a key theme amongst buy-side firms recently and, as Christian Schoeppe from SchoeppeFX International Consulting explains in our latest podcast, this trend has only been accelerated by the pandemic.He also outlines the existing barriers preventing these firms from automating more of their FX workflows and trading activity, talks about how these barriers can be overcome and provides practical guidelines on how to quantify the benefits of this technology. 

Whereas Episode 31 of our podcast series focused largely on the evolution of FX algo designs, here John Quayle from NatWest Markets discusses the evolution of how buy-side firms (and indeed which buy-side firms) are using these products to improve their FX execution capabilities. He discusses using algos to trade emerging market (EM) currencies, why corporate treasurers might be thinking about these products differently from real money or hedge fund clients, how to effectively benchmark the performance of different algos and more. 

What are the key factors likely to move currency markets between now and the end of the year and, perhaps more importantly, what risks aren't currently being priced into the market?These are amongst the questions addressed by Axel Merk from Merk Investments in our latest episode. Merk also discusses the FX liquidity trends, how diverging interest rates could help certain trading strategies and what recent events in China mean for global financial markets. 

In this episode Asif Razaq from BNP Paribas talks about why the pandemic has driven an uptick in the number of firms using execution algos for their FX trades and traces the evolution of these tools from basic, rules-based strategies to sophisticated and interactive ones which effectively enable human traders to augment their own skills.Razaq also delivers his view on what will come next in the FX algo space, arguing that we are likely to begin seeing these tools deployed across a broader range of instrument types.

Stuart Simmons, Director and Head of Currency at QIC, argues in the latest episode that not only is the London 4pm Fix not a good time to trade FX on behalf of investors, but that in fact it might be the very worst time to do so. Expanding on this, he claims that order flow imbalance lead to herd behaviour amongst investment managers trading at the Fix that in turn causes market impact which negatively impacts execution outcomes. On top of this, Simmons makes the case that the interests of investors are misaligned with both asset managers and their counterparty banks when it comes to using the 4pm Fix as a benchmark.

In March 2021 Millennium Global Investments published a report analysing whether emerging market (EM) currencies were priced as cheap or expensive relative to the global environment. The authors of that report, Claire Dissaux and Elisa Baku — who respectively hold the titles of Global Head of Economics and Strategy and Economist at the currency management specialist — both join the podcast to discuss its findings, and what they mean for investors. They also talk about why currency performance is likely to diverge significantly amongst EM countries and how the pandemic has impacted conditions in these markets.

With the Uncleared Margin Rules (UMR) due to start impacting a number of buy-side firms starting this September, Van Luu, Global head of Currency at Russell Investments, discusses the preparations that his firm has been making to ensure compliance, both on their own behalf and on behalf of their clients. He then goes on to analyse how investors should be thinking about currency hedging in the Covid era, analysing the various pros and cons associated with different approaches to hedging FX exposures.

New regulatory requirements have been a huge driver of change within financial markets over the past decade, and FX has certainly not been exempt from this trend. Even now, Allan Guild, the director of Hilltop Walk Consulting, sees the direction of travel in the industry being towards a more regulated trading environment, which market participants will need to adapt to. Consequently, Guild argues that there is now an opportunity  for greater innovation around automation, best execution and building a holistic approach to FX trading.

The over-arching theme of this episode is the “tech-celeration” that has occurred in the FX industry over the past year as firms have been forced to adapt to new ways of operating. Paul Matherne, Head of FX EMEA at BNY Mellon, sees evidence of this trend in how buy-side firms are looking at custody, their willingness to use algos and their desire to automate more of their FX trading and workflows. And looking ahead, he argues that market structure changes will continue to fuel more innovation in 2021.

The discussion opens with Colin Lambert, the co-founder of the The Full FX news website, joking that he has been predicting structural changes within the FX Swaps space for a long time but that the scene might finally be set for these to actually happen. All of which begs the question: why now and not sooner? Elsewhere in the episode Lambert gives his opinion on the state of innovation within the FX industry, why regulators need to ensure that rules are applied uniformly and the strengths and weaknesses of the Global Code of Conduct 

In a forward-looking episode Dr. Sven Schubert from Vontobel Asset Management outlines both, why he thinks 2021 will be a risk-on year for financial markets and that volatility could pick up once again in FX towards the back end of the year. The discussion also covers the knock-on impact to the currency markets of the new Biden administration, whether the yuan could one day challenge the US dollar as the global reserve currency and what happens to the pound and the euro now that the Brexit transition period has ended.

Starting the new year with a bang, this episode features three guests as Peer Joost from DIGITEC joins Lydia Solinski and Simon Bajec from 360T to discuss how the increased importance of market data is changing and shaping the FX industry. They begin by explaining how market participants should differentiate between different data sources and products and highlighting the challenges associated with getting a new data feed off the ground. Then the trio go on to tackle some broader questions about whether data is a democratising force in FX and whether behaviour in the industry is noticeably changing as firms become increasingly data-savvy in their approach to trading.

This episode focuses specifically on trend following, with Andrew Strasman from Chicago-based Totem Asset Group explaining why 2020 should have been a great year for firms deploying this strategy, but also why in some cases it wasn't. He also discusses why FX has become a more frustrating asset class for trend followers to trade, makes the case that this strategy is still an effective diversification play within investors portfolios and talks about how to distinguish a relevant correlation in financial markets from a spurious one. 

Following a contentious US election Peter Lewis, who hosts one of the most popular English language radio programmes in Hong Kong, gives his perspective on what a Biden administration could mean for China and its economy. He also discusses why the People's Bank of China (PBoC) is concerned about a recent surge in the value of the yuan, the growing competition amongst APAC's major financial centres and whether Hong Kong's new national security law could threaten its position within the global financial system.

This episode opens with Ian Campbell from the asset management firm TT International tracing the evolution of technology within the FX industry, explaining that one of the key changes that have emerged as a result is that firms now have many diverse options for how they want to handle different order types. He goes on to talk about trading EM currencies, explaining that whilst liquidity conditions have improved in recent years the myriad of restrictions and regulations that still exist in these markets can still make these currencies challenging to trade. Indeed, although Cambpell notes that many of the regulations that have been introduced into developed markets over the past decade have worthwhile goals, he also suggests that they have slowed the pace of innovation in FX.

Although “volatility events” like the US presidential election, Brexit trade negotiations and a second wave of Covid-19 could provide investors with short-term opportunities to benefit from trends in the currency markets, Marc Chandler from Bannockburn Global Forex argues that they're unlikely to change the longer-term direction of currency moves. During this episode he also discusses the potential impact of a K-shaped recovery on FX markets, whether or not central banks are running out of room to maneuvre and why a recent decision by authorities in China might prove significant for the RMB.

There's been a lot of talk about NDF trading shifting towards electronic channels, but is this actually happening? Robbie Sijbrandij from Flow Traders discusses how this product segment is evolving, in addition to delivering his view on the challenges and opportunities around trading FX Futures, Outright Forwards and FX Swaps. Sijbrandij goes on to explain that for firms like Flow Traders credit remains a core concern when it comes to FX trading, but also highlights the steps that the firm is taking to mitigate any potential issues on this front.

The upcoming US presidential election could prove to be a crucial fork in the road when it comes to financial regulation, explains Justin Slaughter, a partner at Mercury Strategies. In this episode he talks about the potential for the politicisation of US regulatory agencies, the extent to which international cooperation on financial rules could be jeopardized and whether or not geopolitical conflicts around trade and technology could be replicated within financial markets. 

The local FX market in Mexico is ripe for change, and technology could be the catalyst for it, says Juan Garcia at Banco de México. For example, he highlights that ten years ago less than 20% of FX trading in Mexico was conducted via electronic channels, whereas today that figure is estimated to be around 60%. In this podcast episode Garcia talks about the implications of this trend, as well as anaylsing the growth prospects for the Mexican peso going forwards and discussing the impact of the Global Code of Conduct on the domestic market.

In this episode Saeed Amen from Cuemacro discusses the practical challenges facing firms as they try to adopt a more data-driven approach to FX trading. These include finding a source of high-quality data for non-spot FX products, overcoming the fragmented nature of the market and having the right technology with which to analyse the data being accumulated. Amen also explains that sourcing the right data is only the first step — to derive the maximum value from it firms need to apply their domain-specific expertise 

This episode opens with MacGillivray talking about her firm's technology stack for multi-asset dealing, explaining that there is no “one-size-fits-all” solution and, therefore, the desk has instead built out a “best-of-breed” model which deploys asset class specific technology to ensure the best execution outcomes. MacGillivray also highlights areas where she sees existing technology being adapted to fit different asset classes, talks about the importance of reducing manual risk from the trading desk and discusses how attitudes towards handling FX exposures are slowly changing amongst the investment management community. The episode ends with MacGillivray expressing optimism that the fallout from the Covid-19 pandemic could lead to greater diversity within the financial services industry, reducing the existing culture of presenteeism that she says exists today. 

In this episode Christopher Cruden, CEO and Director of the hedge fund Insch Kintore Ltd., reflects on how the FX markets have changed since he launched his first currency trading programme back in 1991 and explains how he has adapted his trading strategy accordingly. Cruden also tackles the question of why trend following strategies have generally yielded poor returns over the past decade and whether or not there is actually such a thing as “sweet spot volatility” when it comes to FX.

Institutional investment portfolios have become increasingly international over the past decade, with one unintentional consequence of this being that FX exposures have similarly increased. As Momtchil Pojarliev, Head of Currencies at BNP Paribas Asset Management, explains, the key question then becomes: how should these investors be managing this risk? In this episode Pojarliev evaluates some of the different currency hedging strategies available to institutional investors and highlights some of the key challenges they face in attempting to implement an effective currency management policy.

In this episode Alejandro Padilla, Executive Director of Economic Research & Financial Markets Strategy at Grupo Financiero Banorte, gives his outlook for emerging market currencies, noting that contagion curves and stimulus policies are likely to be the main drivers of performance this year. Focusing on Latin America in particular, Padilla explains what different factors will determine currency hedging decisions and talks about the impact of the US election on the value of the Mexican peso.

The impact of technology on relationships within the FX industry is one of the central themes of this episode, with Melody Martinez-Davidson from BBVA. She explains that e-trading can actually benefit salespeople by eliminating the administration around their client's trading activity and freeing up time to focus on more important issues. Martinez-Davidson also details, how various client types have shifted some of their FX trading to different execution channels during the pandemic and why it's beneficial for sales teams to have a more holistic, cross-asset focus.

In recent months, everyone has had the experience of being on a virtual group call. Conversation is punctured by awkward silences, followed by two or more people trying to talk at once, as technology still doesn't fully compensate for in-person interaction. In this podcast episode, Andreas Gaertner, a trader at Traton, talks about how his firm has had to adapt to new communication channels, in order to ensure efficient FX execution. He also explains that while the FX market itself is already highly digital, the Covid-19 pandemic has forced firms to make more of the process around trading more digital, a trend that he expects to continue in the future.

The FX Global Code of Conduct has been a big industry-wide initiative in recent years, but when volatility exploded back into life earlier this year, did it really make a difference? In this podcast episode James O'Connor from the Bank of England talks about putting the Code to work and using it to generate greater communication between counterparties. He also discusses how recent events have served to highlight the changing nature of liquidity within the FX market and the implications of the trend towards increased algo usage amongst buy side firms.

In this podcast Livingsmith highlights that FX Swaps are the core funding instrument for most financial institutions – and therefore are critical within financial markets – but that even now pricing for these often remains significantly wider than normal. He also ruminates on the need for greater automation and end-to-end processing, improved communication and a means to effectively measure output within firms.

Alex Clark talks to 360T about the liquidity issues caused by the sudden combination of market volatility and people working from home. However, he says that despite stressed liquidity conditions FX algorithms have performed well, enabling the trading team to focus their attention on the most challenging markets, such as EM currencies, options and NDFs. Explaining that enhanced execution tools are in high demand amongst buy side firms right now, Clark discusses how algos have needed to adapt to changing market conditions in recent weeks.

If you could go back in time six months before the pandemic, what advice would you give yourself? This is one of the questions put to JB Mackenzie, Managing Director, Futures and Forex at TD Ameritrade, in this podcast episode. He also talks about the impact of recent central bank stimulus, trading in 24 hour markets and how technology has made life better for investors.

In this podcast episode Juan Landazabal from GAM Investments runs through some of the key factors that had to be considered as trading activity moved out of the office and into people's homes. Having now adjusted to this initial wave of change, he also highlights some of the longer-term challenges – and opportunities – associated with a more decentralised working and trading environment.

In this lively discussion Bhav Trivedi talks to 360T about the technical challenges associated with trading in an isolated environment. He also points out how the recent FX volatility tested banks' re-pricing and auto-hedging capabilities, and why an increased reliance on technology has not diminished the big importance of relationships in the industry.