RESEARCH -- Top banks dominate research and strategy

Access to these resources brings these banks an advantage with clients, said the successful analysts in the research and strategy section of FX Week’s annual survey.

Mansoor Mohi-Uddin, FX strategist at top-ranking UBS in London, said that it is important to complement the standard daily research that monitors the market with tools that enable clients to develop strategy themselves. "These tools use quantitative models to monitor flows and generate ideas of future flows, which we test and then pass on to our clients," he said. "We have had a strong take-up of these in the last two years."

Michael Rosenberg, global head of FX research at Deutsche Bank in New York, said that as a large bank you have access to more flow data but it is not this that marks out Deutsche’s research. "Research brings its strength from the additional value you bring to clients," he said. Deutsche’s approach is to tailor reports to the various time horizons that are key to its clients. In addition to daily comment, the bank produces a weekly report that bridges the short- and medium-term view and the bi-weekly Exchange Rate Perspectives that provides extensive medium- to long-term coverage of all major and emerging market currencies.

Mohi-Uddin said another crucial factor in UBS’ research success has been reacting to changing needs in the market, such as the effect of central bank intervention, which has become more important this year. "We developed a model to help quantify and understand the impact from intervention, and we’ve incorporated this into our regular analysis," Mohi-Uddin said.

Top banks are also favoured because of their wider access to a range of clients. "The wider your client base, the more you understand the behaviour of each segment of the market, and where it is sensitive to changes," Mohi-Uddin said.

One bank that did perform well in a particular sector, however, was Goldman Sachs, which was nominated third by bank clients.

Jim O’Neill, chief economist at Goldman Sachs, said that its research is specifically tailored for the non-bank community and so the fact that it is rated highly by banks is "hugely gratifying".