BBSP launches FX implied volatility forecasting

The service is on trial at a number of BBSP’s customers, which include BNP Paribas, Credit Suisse First Boston, Deutsche Bank, Dresdner Bank, HSBC, JP Morgan Chase, Merrill Lynch and Société Générale. Customer feedback so far has proved positive, claimed Frederic Maurice, sales director at BBSP.

"We started to forecast fixed-income spreads last year. It was a normal and logical move to develop further services to satisfy these desks,” said Maurice. He added that BBSP added calendar spreads and inter-market spreads last month.

Using technical analysis - the study and prediction of price movements based on the analysis of data - BBSP forecasts the evolution of the currency and fixed-income markets and futures indexes. The company claimed technical analysis is a valuable addition to fundamental analysis and provides a close-up of the main trends by forecasting intermediate market moves.

The company’s analysis is updated in real-time depending on how the market evolves. The analyses are personalised to suit each client’s need, said Philippe Sadock, founding partner and chief executive of BBSP. "We try to be reactive and we deal only with the end users," Sadock said. The firm has 30 analysts that call their clients in the morning and during the day if necessary to talk through the forecasts.

Forecasts are offered before markets open and updates are posted via the internet. Each client has access to the website, which was designed by CREO, the firm’s in-house development team. CREO also designed and built the charting and analytic software, Analysis Comes Easy (ACE), which BBSP started selling to clients at the beginning of this year.

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