Big Prime Brokers issue liquidity warnings for Monday morning

Liquidity gaps will become an increasing issue for the FX market and we are seeing/hearing increasing instances of big Prime Brokers warning their clients that such events could occur.

This is part of an email which Barclays sent out to their client base of hedge funds, corporates, banks and retail brokers:

As a result of current uncertainty surrounding the ongoing position of Greece in the Euro Zone, there is a chance of dislocation and highly illiquid conditions in the EUR FX market.  Whilst Disrupted Market Conditions could arise at any time, there is, in particular, a risk of FX markets opening on Monday morning at a significantly different level from the Friday night close.

I’m also hearing through the chatroom network that “a few of the retail shops hiked margins pre weekend due to the same reasoning”.

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