Business

Reasons Why FX Brokers Need Access to Market Liquidity

Liquidity is an important subject in finance. A liquid market contains both eager buyers and sellers, allowing investors to purchase and sell assets quickly and cheaply.

FX brokers play a significant role in providing liquidity in the foreign currency markets.

FX brokers would be unable to offer efficient execution to their clients if they did not have access to liquidity.

In this post, we will look at why FX brokers require market liquidity and how they may use it to better serve their clients.

Forex Liquidity: What Is It? Why Is High Liquidity Important for Brokerages?

The ease with which players may buy and sell currency and other assets in the FX market is referred to as liquidity.

A significant quantity of buying and selling must occur inside a market in order for it to be deemed liquid.

This guarantees that investors may acquire and sell assets swiftly and cheaply.

FX brokers are critical in supplying liquidity to the foreign exchange markets.

Currency exchange brokers would be unable to service their customers effectively if they did not have fast access to significant sums of cash.

There are two sorts of liquidity for brokers: currency market liquidity and order book liquidity.

Market liquidity refers to investors’ capacity to acquire and sell assets without fear of price fluctuation.

The phrase order book liquidity refers to the ease with which a broker may fulfill a customer’s order independent of the underlying asset’s current market price.

One of the primary reasons that FX brokers want market liquidity is so that they may give their clients narrow spreads.

When a broker has access to market liquidity, they may give their clients prices that are extremely near to the market price in real time.

The broker might simply purchase or sell assets from their inventory.

Another reason FX brokers want liquidity is so that they may provide their customers quick deal execution.

When a broker has access to market liquidity, they may rapidly fill their clients’ orders.

This is due to the fact that the broker does not need to wait for another party to agree to deal with them.

Broker’s Liquidity: Factors to Consider

A broker’s liquidity can be affected by a variety of elements. These are some examples:

The scale of the broker’s operation: A larger broker is more likely to have access to market liquidity than a smaller broker. This is because a large broker is likely to have a larger number of customers, resulting in more transactions.
The country in which the broker operates: A broker who works in a country with a high level of regulatory oversight is likely to have better access to market liquidity than a broker who works in a country with a lower level of regulatory oversight, because highly regulated countries often have more demanding criteria for brokers, which gives them more access to market liquidity.
The following are the types of clients that the broker has: A broker who works primarily with huge institutions as clients has access to a greater pool of market liquidity than a broker who works mostly with regular customers. This is because institutional customers frequently participate in high-volume trading, giving the broker more access to liquidity.
The broker deals the following assets: A broker who works with a broader range of assets will frequently have better access to the market’s available liquidity than a broker who works with fewer asset categories. The more assets that are listed for sale, the better the broker can identify buyers and sellers for such assets.
Relationship of the broker to other market participants: Compared to a broker who does not have good relationships with other market participants, a broker who does is likely to have more access to market liquidity because a strong connection gives the broker more opportunities to deal business with other market participants.

How Are Traders Affected By the Presence or Lack of Liquidity?

Liquidity is important for traders because it allows them to enter and exit transactions promptly and at a reasonable price.

When liquidity is low, traders may have to accept a lesser price for their assets in order to sell them, or they may have to wait a long period to find a buyer prepared to pay the price they desire. In any case, a lack of liquidity can be problematic for traders.

Too much liquidity, on the other hand, might be a concern. Prices can balloon if there are too many buyers, and prices can fall if there are too many sellers.

In either case, these circumstances might make it difficult for traders to profit.

The ideal condition for traders is when there is just enough liquidity to allow them to trade without significantly impacting prices.

This sweet spot might differ between assets and marketplaces, so traders must be aware of the conditions in each.

Providers of Liquidity and Brokers

Access to market liquidity requires a broker to have a link with a liquidity provider.

The broker cannot execute the orders of their customers without the assistance of LPs, which are financial institutions that lend them money.

Banks and hedge funds are the two most popular forms of limited partnerships.

Brokers must have access to market liquidity since they cannot always rely on customer orders to produce enough cash to fulfill all of their operations.

For example, suppose a broker has a client who wants to buy 10 million EUR/USD but only has 5 million in their account.

They will need to find another source of funding to cover the remaining $5 million. This is where LPs come into play.

The choice of an FX liquidity provider is crucial for every broker since it may have a substantial influence on their company.

The following are the most important aspects to consider while choosing an LP:

The provider’s network size: The greater the network, the more likely the provider will be able to fulfill your requests.
The provider’s technical quality: The better the technology, the faster and more efficient your transactions will be executed.
Financial stability of the provider: You want to ensure that your supplier can satisfy their duties to you even in difficult economic circumstances.

Verdict

Market liquidity is an essential topic that every trader should address since it may have a big influence on how their trades are executed.

It is less probable that a broker will be able to fill their clients’ orders at competitive pricing if they do not have simple access to market liquidity.

A broker with good access to market liquidity, on the other hand, is more likely to succeed.

Brokers who have access to several market liquidity sources are more likely to deliver competitive pricing and order execution on time.

As a result, FX liquidity solutions that provide brokers with access to several liquidity sources are frequently the best option.

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Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP