London experiences massive drop in Euro swaps trading post-Brexit
Trading in euro-denominated swaps has dropped by nearly 30 per cent in London since the end of the Brexit transition period on 31 December, with trade primarily shifting to New York, Amsterdam and Paris.
According to new data from financial research company IHS Markit, published earlier today, euro swaps trading in the City of London made up just over 10 per cent of the overall market last month, compared to 40 per cent in July of last year.
Meanwhile, EU platforms made up a quarter of the total euro market in January, compared to only 10 per cent in July 2020, while trade on US platforms doubled from 10 to 20 per cent.
The figures come as it was reported that Amsterdam surpassed London as Europe’s largest share trading centre last month.
Some €9.2bn shares a day were traded on Euronext Amsterdam and the Dutch arms of CBOE and Turquoise, the London Stock Exchange’s platform, in January – a more than fourfold increase from December, the Financial Times reported this morning.
By comparison, volumes fell sharply in London to €8.6bn, knocking London from its main position as Europe’s largest trader.
Many City insiders, however, believe that the lack of an EU-UK equivalence deal could in fact help the City appeal to more global destinations, including Hong Kong and Singapore.
Barclays boss Jes Staley last week said that a more global outlook would do the City well.