CLS Group reports solid FX volumes for January 2022, but lags YoY

Foreign exchange settlement provider, CLS Group saw strong volumes in January 2022 as investors flocked to safe haven assets after the threat of a Russian invasion of Ukraine has left financial markets jittery.

The average daily traded volume submitted to CLS was $1.87 trillion in January 2022, which is up 14 percent month-over-month from $1.64 trillion in December 2021. Across a yearly timetable, the figure was down 3 percent relative to January 2021’s figure of $1.93 trillion.

CLS reported swaps volumes at $1.32 trillion in January 2022, which is up from $1.17 trillion in December 2021, a rise of 12.9 percent month-over-month. However, the figure was down by -3.4 percent on a yearly basis from $1.37 trillion in 2021.

Global FX swap volumes surged to nearly $3.2 trillion per day and now account for almost half of global FX trading, according to the Bank for International Settlements’ latest survey, mirroring a pick-up in the spot market and reflecting strong trends in OTC sectors.

In terms of CLS’ spot FX volume, the group has reported the figure at $455 billion in January 2022, which is up 21 percent relative to $374 billion in the month prior. Additionally, the spot turnover was down by -1.3 percent over a yearly basis from the $461 billion set in 2021.

A mixed performance was pronounced across CLS forwards business, which yielded a figure of $95 billion last month, down -1.1 percent over a monthly basis. The figure was also down -2 percent year-over-year from $96 billion in January 2021.

“In January 2022, we saw average daily traded volumes of USD1.87 trillion, a decrease of 3% compared to January 2021. Over the same period, FX spot and forward volumes both decreased by 2%, while FX swap volumes were down 3%,” said CLS’s Global Head of Product, Keith Tippell.

CLS Group, which provides risk mitigation and settlement services for FX dealers and institutions, has shifted its reporting methodology for FX data in 2018. The figures are now reported based on one side of FX transactions and only one of the four legs of FX swap trades, in line with BIS standards and Foreign Exchange Committee market reports, and thus it avoids double counting the total amount of trades.

The company, which was formed in 2002 to reduce FX settlement risks, recently has been keen to promote itself as a provider of innovative products, including post-trade risk management, aggregation, and netting solutions.