From Futures to FX: Pushing Our Multi-Asset Strategy Forward
FX is the largest financial market in the world by trading volume and has been at the epicentre of the storm that has hit capital markets over the past three months.
As TT moves further down the path to building a holistic, multi-asset trading platform, foreign exchange (FX) is an essential component of our offering to clients both today and in the future. We recently completed our integration to the EBS Market central limit order book and will soon also offer EBS Direct and CME’s new FX Spot+ platform.
This represents a substantial expansion of our FX liquidity, allowing TT clients to connect directly to EBS Market to view prices and trade in one of the largest primary pools of liquidity in the global spot FX market.
Opportunities in FX
In the wake of the U.S. trade war and global tariffs in the first quarter of 2025, we saw volume records smashed on multiple venues.
FX markets are at the heart of global trade, enabling investors to take positions and hedge exposures impacted by the imposition of tariffs as well as divergent economic growth across the globe.
As a result, there have been unprecedented moves given the increased volatility. The USD has weakened to its lowest level in three years as trade policies flip-flop seemingly overnight, and it’s this uncertainty that has caused a sell-off in the bond market, in some currencies over the past three months. For example, between April 2 and May 6, the Taiwan dollar strengthened by more than 10%, including a two-day move of 6.5% in early May.
Consolidating Platforms
Many of our clients are active in FX markets. Historically, they have had to use separate platforms to stream prices and trade. As such, we have seen strong demand from our existing client base, particularly on the buy side, for a consolidated platform to streamline their trade workflows.
The consolidation of trading platforms brings multiple benefits, from reduced costs and screen real estate to improved operational efficiency and risk management.
Consolidation through bringing FX onto the TT platform also brings opportunities outside the execution management system (EMS). Single drop copies for futures, options and FX simplify post-trade workflows, while a single FIX API improves connectivity.
The expansion of the TT platform into FX has also seen strong support from liquidity providers (LPs), which are launching new over-the-counter (OTC) products on our platform. We are a technology partner, not a venue, so we’re not in conflict or competition with the LPs – we want to be partners and create an ecosystem that is mutually beneficial for all participants.
Data and Analytics in FX
I joined TT to lead our expansion into FX two years ago, having previously held roles at Goldman Sachs and the Californian-based quant macro hedge fund First Quadrant.
We are building our FX capabilities amid the tailwinds of several key trends that are driving the industry forward. One is the ongoing electronification of the industry. This is not a new trend – I have been speaking at industry events for years now on the growing importance of electronic trading.
However, the growth of electronic trading is continuing to accelerate, driving another market trend – the move from a rule-based trading environment to one driven by data and analytics, whether that applies to algorithmic trading, AI or machine learning.
This transition, however, will not happen overnight.
Historically in the FX market, there has been a lack of technological innovation and, in some corners, an unwillingness to change.
For the transition to a market driven by data and analytics to take place, the right technology needs to exist along with firms and traders who are willing and open to transforming their execution workflows.
I see parallels with the initial growth of e-trading in FX. At first, many firms were reluctant to transition away from voice trading. But as the adoption grew on the sell side, the buy side soon followed.
I expect that we will see the same pattern in the shift to a market defined by data and analytics. This will result in an equally significant change in the role of the trader, which will become similar to that of a pilot in the cockpit monitoring automated executions across various asset classes on a single platform.
Building for the Markets of Tomorrow
It is around this vision that we are building out the TT platform. Our reach and connectivity into the global capital markets perfectly positions us to build that multi-asset trading platform and offer our clients the ability to consolidate their FX platforms onto TT.
We are not simply building another FX execution platform. With each asset class and new functionality we develop, the TT platform becomes greater than the sum of its parts.
With the development of our FX offering, our clients have everything they already have on their existing FX platform but can also access all of our futures trading tools, such as Autospreader® to trade the basis or ADL®, our bespoke algo builder as well as our transaction cost analysis (TCA) tools.
These are truly fascinating times for the global FX markets, and I and the team are excited to be working with our clients globally to build a multi-asset platform fit for the markets of tomorrow. To find out how TT can power your growth in FX, contact your TT representative.