All NewsEducationTV
Equities & FundsCrypto & Digital AssetsAI & TechnologyBusiness & CorporateUS Politics & PolicyGeopolitics & Global RiskMacro, Rates & FXCommodities & EnergyEuropean Politics & MarketsAsia-PacificReal Estate & Property
All NewsHome
← Back to Macro, Rates & FX

Futures venues eye growth in BRL trading with Asian investors

Created at 25 Aug · 3:41 AM1 source↑ Market-relevant
IN SHORT

CME and SGX are seeing increased demand for Brazilian real futures from Asian investors seeking to access carry trade opportunities during their operating hours. This trend highlights a growing need for out-of-hours liquidity in emerging market currencies.

Who's Involved

CME
Futures venue seeing increased demand for BRL trading
SGX
Futures venue seeing increased demand for BRL trading
Asian investors
Driving ramp-up in BRL futures trading
Hedge funds and asset managers in Asia
Stepping up activity in listed Brazilian real futures

↳ Why This Matters

The increasing demand for Brazilian real futures from Asian investors highlights a growing trend in global FX markets, where investors seek carry trade opportunities and accessible liquidity outside of traditional trading hours. This could lead to expanded trading hours and services for emerging market currencies.

Key facts

  • Asian investors are increasing their activity in listed Brazilian real futures.
  • This surge in demand is linked to accessing lucrative carry trade opportunities.
  • Futures exchanges CME and SGX are observing this growing demand for BRL liquidity.
  • Trading venues are providing out-of-hours quotes for these markets from Hong Kong.

Futures venues such as CME and SGX are observing a significant increase in trading activity for Brazilian real (BRL) futures, driven by Asian investors. These investors are leveraging the opportunity to access one of the year's top-performing foreign exchange carry trades during their own operating hours. The demand for BRL liquidity from Asian clients has prompted these exchanges to offer out-of-hours trading, with quotes for Brazilian, Mexican, and Andean markets being provided from Hong Kong ahead of the local market open. This trend underscores a growing need for accessible and liquid emerging market currency trading options for global investors.

Frequently asked questions

A carry trade is a strategy where an investor borrows in a currency with a low interest rate and invests in a currency with a high interest rate, profiting from the interest rate differential.

The Brazilian real is currently offering one of the best performing foreign exchange carry trades, indicating a significant interest rate differential that investors can capitalize on.

CME and SGX are the futures venues noted for increasing demand and offering out-of-hours trading for Brazilian real futures.

What Happens Next

01Further growth in out-of-hours BRL trading is anticipated.
02Other emerging market currencies may see similar demand from Asian investors.
CME Headlines
  • Fresh from the Trading Room: Bid From Both Ends
    25 Aug · 5:00 AM
  • Fresh from the Trading Room: Bid From Both Ends
    25 Aug · 4:15 AM
  • 10-Year Treasury Note futures rose as yields fell to 4.70%.
    24 Aug · 8:27 PM

How It Developed

Asian hedge funds and asset managers are increasing activity in Brazilian real futures.
This demand is driven by access to the year's best-performing foreign exchange carry trades.
Futures venues like CME and SGX are experiencing growing demand for BRL liquidity from Asian clients.
These venues are quoting Brazilian, Mexican, and Andean markets out of Hong Kong ahead of local market opens.

Sources

T1
Futures venues eye growth in BRL trading with Asian investorsRisk.net

Related Stories

Risk managers consider intraday repo hazards and benefits
25 Aug · 3:41 AM
Traders Price Higher ECB Rates Amid Inflation Fears
24 Aug · 6:23 AM
RBA says reserves still above demand amid shift to new liquidity system
25 Aug · 5:16 AM
Gold and Bitcoin Surge as US Debt Concerns Drive Dollar Weakness
25 Aug · 5:17 AM
Dollar Firms on Iran Sanctions, Eases as Treasury Buyback Rumors Surface
24 Aug · 10:06 PM