Trade tensions, slowing global growth, central bank intervention and geopolitical unrest contributed to softening macro environment and low currency market volatility. As a result, global foreign exchange activity was down this year, with many banks reporting results well below budget.
Hiring activity kept up a moderate pace at all levels with both US and foreign banks looking to upgrade and take advantage of available talent due to shifting strategies. We saw a continuation from last year in EM trading hires, an uptick in corporate sales moves, and a good number of e sales and e trading hires. Most of the institutional hires were for real money sales, and there were fewer spot and options hires than ever. Also, the quest for diversity was (and remains) feverish.
We expect talent acquisition to be selective again in 2020 and believe it will be 2nd and 3rd tier shops who will be the most active as they look to gain market share. Candidates are gravitating to places that exhibit a strong commitment to growth and a collaborative culture.
Compensation season is underway and the mood is dismal. Banks have been managing expectations down, but it is hard to swallow given the stronger than expected fixed income profits in the 4th quarter. Early communicators are paying voice FX down 15 25%, and in some cases more (and in fewer cases less). Corporate FX and EM FX fared a bit better, and eFX folks are flat or up small.
The subtext is telling us this is a wholesale repricing of the industry which we suspect is the new normal.