Thursday, April 16, 2020 Stamford, CT USA — The massive spike in volatility due to the COVID-19 pandemic and a nearly unprecedented climb in the value of the dollar has left market participants scrambling for cover.
As they move to respond, large financial institutions are likely to turn first to dealers among the 2020 Greenwich Share Leaders, including Citi, J.P. Morgan and UBS in Global Financials FX, along with HSBC for Emerging Markets. Many large companies will rely on Citi, HSBC and J.P. Morgan—the 2020 Greenwich Share Leaders in FX Trading among Corporates.
“Companies and financials reacting to the COVID-19 crisis are also likely to call on dealers that have proven their mettle in past bouts of volatility,” says Greenwich Associates Principal Satnam Sohal. In FX, that includes Citi, J.P. Morgan, HSBC and UBS—the four banks cited as the industry’s best when it comes to providing consistent price quotes and trade execution in volatile markets, according to Greenwich Associates most recent research.
Based on client ratings of dealer performance in 2019—prior to the outbreak of COVID-19 and the current financial market crisis—J.P. Morgan is the FX dealer that earns the most recognition from top-tier financial institutions globally when it comes to providing consistent quotes and execution in volatile markets. Citi is next, followed closely by UBS, HSBC and Goldman Sachs. Among corporates, HSBC is viewed as strongest in these terms, barely edging out a closely bunched group that includes J.P. Morgan, Citi and BofA Securities.
A bank’s ability to consistently make markets during periods of volatility plays a big role in determining how companies and financial institutions view their FX dealers overall—as evidenced by the overlap between the rankings cited above and the list of overall 2020 Greenwich Share and Quality Leaders in Global FX.
Among financials, the 2020 Greenwich Share Leaders are Citi, J.P. Morgan and UBS. (These dealers have the biggest market shares in FX trading among financial institutions ranked as “top tier” in terms of annual trading volume.) The 2020 Greenwich Share Leaders among corporates are Citi, HSBC and J.P. Morgan.
J.P. Morgan takes the title of 2020 Greenwich Quality Leader among financial clients in FX Sales, Trading and Service. (Greenwich Quality Leaders receive quality ratings from clients that top those of competitors by a statistically significant margin.) Among corporates, the 2020 Quality Leader designation goes to HSBC and BofA Securities for Sales; Citi, HSBC and J.P. Morgan for Trading; and HSBC, BofA Securities and Citi for overall quality of Service.
European Companies Rely on Domestic Dealers
As large European companies move to respond to historic FX volatility, many are likely to turn to the banks with whom they have deep and long-lasting relationships, many of which will be domestic or regional banks.
“Despite the relatively fractured nature of the market, there is consensus among the region’s biggest companies about which FX dealers provide the best service at the pan-European level,” says Greenwich Associates Principal Thomas Jacques. “The 2020 Greenwich Quality Leaders for Service in European FX are Citi, HSBC and J.P. Morgan.”
Canada: Electronic Execution vs. Custom Solutions
Although the players remain the same, Canadian foreign exchange today is a different—and increasingly bifurcated—game.
This division is clearly reflected in the list of Greenwich Associates 2020 Share and Quality Leaders in Canadian FX. Securely at the top of that list is TD Securities, which is tied with RBC Capital Markets for the No. 1 position in terms of market share in FX trading, and earned the title of 2020 Greenwich Quality Leader in Canadian FX.
2020 Greenwich Leaders in Foreign Exchange Services – Global
2020 Greenwich Leaders in Foreign Exchange Services – Europe
2020 Greenwich Leaders in Foreign Exchange Services - Canada