As is generally the case, December volumes were well below average as volatility waned around the holidays at the end of the year. Profitability was also lackluster with an abnormally high number of retail clients posting gains. The last week of the month did turn the tide for many brokers as gains were recorded in GBP/USD, gold, and a broad-based USD sell-off.

*Average Daily Volume represents the daily volume from ISRA customers for each day of the month divided by the average daily volume for the month. Each day is represented as a percent of the average.

** Average Daily B Book PnL represents the daily B Book PnL from ISRA customers for each day of the month divided by the average daily B Book PnL for the month. Each day is represented as a percent of the average.

Source: IS Risk Analytics Database. Past Performance is not necessarily indicative of future results

ASIA

In response to a breakout of covid-19 infections in the Chinese city of Xi’an, the country’s government instituted its largest lockdown since Wuhan was sealed at the outset of the pandemic. Xi’an, a city of more than 13 million people, has been on strict lockdown since December 23. Controlling the virus is a top priority of the government in advance of the Beijing Winter Olympics which are scheduled for February.

EUROPE

The potential of an invasion of Ukraine by Russian forces is a top concern of many European leaders as well as the United States. This is the result of Russia’s buildup of around 100,000 troops near its border with Ukraine. The US is set to begin talks with Russia in early January and with NATO shortly thereafter, but the European Union itself is not currently a part of the negotiations.

AMERICAS

All eyes are on the Federal Reserve in the new year as markets await news of the details of the central banks plans to cut its balance sheet and raise interest rates. Current expectations are that the cut to the Fed’s bond holdings will occur sometime after the first raise in interest rates, which could come as soon as the first quarter of the year.

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