FX futures momentum challenges primary venues’ pricing role

With
banks
and
buy-side
firms
becoming
more
active
in
the
foreign
exchange
futures
market
and
spot
volumes
traded
on
primary
venues
in
decline,
some
market
experts
believe
the
latter’s
usefulness
when
constructing
pricing
models
is
dwindling.

While
futures
volumes
have
grown
in
recent
years,
trading
of
FX
spot
on
the
primary
venues
of
EBS
Market
and
Refinitiv
Matching
–
typically
key
inputs
into
pricing
models
–
have
fallen
away.
Across
the
exchanges,
futures
average
daily
volumes
(ADV)
now