NEW YORK, Nov. 29 (Xinhua) -- The world's banks are on track to report the lowest revenue from foreign-exchange and rates trading since the COVID-19 pandemic, hit by tighter margins and a challenging macroeconomic backdrop, according to Bloomberg News.
"Over 250 firms including Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc. and Morgan Stanley are forecast to make a total of 32 billion U.S. dollars from trading of Group-of-10 rates and 16.7 billion dollars from currencies, according to data collected by Coalition Greenwich. That's about 17 percent and 9 percent less than last year, respectively," said the report on Thursday.
Investor confidence in making big macro calls dwindled this year as economic data surprises whiplashed bets on interest-rate cuts from the world's major central banks. A seemingly too-close-to-call U.S. presidential election and the unwind of once-popular yen-funded carry trades also rattled markets, according to the report.
"2024 has been a year of sitting and waiting on the sidelines," Angad Chhatwal, head of global macro markets at Coalition Greenwich, was quoted as saying. "Hedge funds have come into the market sporadically around data points and events but they've not been as active on a continuous basis compared to previous years."
Coalition Greenwich forecasts rates trading revenues will drop further to around 30.9 billion dollars in 2025 and 28.1 billion dollars in 2026 as non-bank market makers expand their presence and as bonds catch up on the electronification of other markets, it said.
Meanwhile, the performance of currency traders is seen improving to 17.2 billion dollars in revenues in 2025 and 17.6 billion dollars in 2026. "Donald Trump's administration is expected to fuel volatility in the 7.5 trillion-a-day dollars foreign-exchange market," it added.
