FX trading weighs on NEX Markets’ profits

Flat revenues at NEX Group’s FX trading unit hit profits across its Markets business.

Low foreign exchange (FX) and euro interest rate volatility hurt profits at NEX Group’s recently rebranded fixed income and FX trading business, according to its full-year results.

Reporting full-year to 31 March, NEX’s FX trading platform’s revenues were flat on a constant currency basis, with average daily volume falling 7% to $83 billion.

NEX said its risk mitigation service – Reset – was affected by low short dated interest rate volatility in Europe, as its revenue decreased by 12% on a constant currency basis.

NEX Markets did see revenues surge 8% on a constant currency basis, driven mainly by its fixed income platform BrokerTec.

BrokerTec sales grew 8% compared with the year prior due to increased average daily volumes across US Treasuries, US repo and European repo trading.

NEX Markets explained for EBS, the uptick in volume for the five weeks following the result of the US presidential election was unable to offset lower volumes in the first half of the year.

Michael Spencer, CEO at NEX Group, commented: “Our performance remains strong in a tough market environment. NEX Markets has focused on expanding its product suite to a wider client base and continues to win market share in US Treasury actives, EU Repo and Asian NDF’s.”

Earlier this month, NEX Group rebranded the EBS BrokerTec business and it was renamed NEX Markets.

It has retained its services for FX and fixed income trading and the senior management team remains in place, with Seth Johnson continuing as CEO of the business.