Deutsche Börse has introduced its AlphaFlash algorithmic news feed to Brazil, marking the exchange group's first foray into Latin America.
The new feed, which is hosted in a data centre in Sao Paulo, is designed to provide machine-readable news that can help algorithms make trading decisions based on macroeconomic data. Users can choose which data they want to receive, including economic indicators for the US, Canada, Europe or Asia-Pacific, or US and global treasury auctions. The feed automatically transmits information from the source directly to the trading algorithms used by clients. AlphaFlash draws on global macroeconomic and treasury auctions data such as payroll information from the US, Europe and Asia.
The exchange group already provides AlphaFlash from its data centres in Chicago, New Jersey, Washington D.C., Frankfurt, London, Sydney, Tokyo and Singapore.
“One of the key criteria that helped us decide to launch this algo news service in Brazil was that Brazil has an established and growing algorithmic and high-frequency trading community – hedge funds, local banks, algo trading firms and others are using these trading tools, and that is important for us," Georg Gross, head of front office data and analytics at Deutsche Börse, told theTRADEnews.com.
A further factor behind the choice of Brazil as a market for machine-readable news was the relative interconnectedness of the country’s economy to its largest overseas counterparts, which Gross said helped ensure the relevance of the data to local and international market participants.
"We noticed that Brazil reacts strongly to global macroeconomic news, especially from the US and Europe and increasingly from China – its biggest export-import partner,” he said. “It is an established, liquid, electronic market with liquid equity index futures and opportunities in multiple asset classes and a strong base of local interest in algo trading technology. As such, Brazil provides a good base for a service such as ours."
Several large international brokers and technology and connectivity firms have released trading algorithms, connectivity links and other electronic trading technology in Brazil in the last 18 months, including Goldman Sachs, Deutsche Bank, Morgan Stanley, Fidessa, SunGard and StreamBase. In addition, US exchange operators Direct Edge and BATS Global Markets have also expressed interest in launching a trading platform in the country to compete with incumbent exchange BM&F Bovespa, though any such plans would need to find an independent solution for clearing, as the native bourse has stated that it would not clear for a rival.