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The evolution of the FX Swaps market: Commerzbank the first client live on Forwards Matching API

Paul Clarke
Paul Clarke
Head of FX Venues

There is strong market demand to trade more volume in FX Swaps electronically, as electronic trading could enhance the efficiency of eHedging flows and positions, especially given the recent growth in FX Swaps trades.

  1. Commerzbank is paving the way by being the first participant to make prices using the full Forwards Matching API solution.
  2. The market demand for FX Swaps is making the market evolve faster to adopt electronic execution.
  3. How to improve further efficiencies in the FX Swaps Trading market by enabling automated access to the market leading Forwards Matching MTF venue.

According to the 2019 BIS survey, FX Swaps are one of the fastest growing instruments in FX, with 49% of overall traded volume being FX Swaps in a total of $3.2 trillion average daily volume traded in 2019. Only a small percentage of this volume was traded on electronic venues.

“With the move towards electronification of FX Swaps trading comes the need and the opportunities for more innovative solutions to drive efficiencies without sacrificing liquidity and effective trade execution.  This is especially true in the ongoing market where the trading workflow has changed considerably,” said Paul Clarke, Head of FX Venues, Refinitiv. “Matching Forwards API delivers on this need. With access to over 300 active client sites trading on the market leading venue for FX Swaps, Matching Forwards API will help achieve greater efficiency for FX Trading.”

Creating efficiencies in the FX Swaps trading market

To respond to this market need, last year we launched the new Forwards Matching API solution to enable automated access to the market leading Forwards Matching MTF venue and so help support further efficiencies in the FX Swaps trading market.

Based on the Spot Matching API already used by many FX participants, the Forwards Matching API will further support trading efficiencies and the management of costs for Refinitiv clients. With APIs available for Forwards, clients will benefit from additional transparency on data and quick access to liquidity bringing greater efficiency across the trading workflow.

Commerzbank now live on Forwards Matching API

Commerzbank have now become the first participant to make prices using the full Forwards Matching API solution. They are pricing on selected short and long dated instruments and tenors to the broad Matching community, and successfully executed trades with STP to their internal systems.

Marius Jubin, Senior G10 eForwards Trader at Commerzbank said, “Until now, the interbank market has lacked an electronic central limit order book driven venue for trading FX Swaps across the full spectrum of active maturities and in particular for EUR crosses. We’re pleased to join Refinitiv’s initiative to deliver more liquidity beyond the funding tenors to the market and to our clients by being the first counterparty to actively trade on their flagship Matching venue via API.”

As a Central Limit Order Book this is huge milestone for the venue as the regulated Forwards market evolves into electronic execution. After a short time we have already seen growth in volumes across tenors which are now being populated and increased participation from clients, showing the value of a long established community.

Dmitry Ilyaev, Head of eFX Trading at Commerzbank wrote, “This development builds on a strong legacy of FX electronic trading at Commerzbank. Over the last few years we have dedicated significant effort towards extending our electronic trading capabilities beyond just FX Spot, and these efforts are bearing fruit. We’re excited to help pave the way for the future evolution of the FX Swaps market.”

“The first participant live and trades done using the full API solution is a huge step for the venue and the electronification of the FX Swaps market. We appreciate the support and work done by Commerzbank, especially in the current working environment. We are also working with other clients who are integrating with the solution”, said Paul Clarke.

Forwards Matching is a market leading FX Swaps venue, used by traders across a large and wide set of globally distributed clients and supporting hundreds of billions of dollars in trading a day.

Forwards Matching is part of Refinitiv’s MTF, regulated by the Central Bank or Ireland, and fully supports MiFID II execution, monitoring and reporting requirements. On the Matching platform, clients can trade FX swaps on the MTF and FX spot off the MTF.

Matching provides access to firm Spot and Forwards prices with a high certainty of execution. With approximately 900 client sites connected and almost 200 client sites trading through the FX Matching API.

Discover how Refinitiv FX Matching can help you achieve efficient FX trades