Unique insights regarding how the FX market today is developing.

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.