Without giving too much away, I can say that this year’s Euromoney FX Poll is the biggest ever in terms of the numbers of voters and the volumes reported. What was even more noticeable this year is just how big the so-called retail sector has become. The banks have long realized this and a few have tried to work out ways they can benefit. The retail aggregators now also recognize the value of their business, which is a dramatic change from a few years back when they had to go begging for liquidity.
Players in the retail sector have become an extremely reliable source of information, especially about the banks’ technology and the quality of their pricing. Consistent feedback says that, not surprisingly, the banks have at times widened their spreads over the past nine months or so. Frequently, they claim, this is because of credit issues, which is patently nonsense. At one time, a systematic widening of spreads would have caused consternation among the retail aggregators but the competition for their flow means it is not such an issue, as they invariably soon come in again. Most buy-side particpants require consistency but for those that operate in the market on a 24-hour basis it is absolutely paramount.