(Reuters) - UK-based financial broker NEX Group (L:NXGN) said Donald Trump's victory in the U.S. presidential election had boosted trading activity, but it was too early to know whether this marked the end of a prolonged period of subdued market conditions.
The company, which was called ICAP before the sale of its global hybrid voice brokering business to TP ICAP (L:TCAPI), reported an 11 percent rise in revenue for the quarter ended Dec. 31, 2016.
NEX Group said an increase in trading activity as customers considered the impact of potential policy changes on bond and foreign exchange markets after Trump won the elections was behind the rise.
Both of its electronic platforms, BrokerTec and EBS, performed robustly under heightened volumes, it added.
Trump's surprise victory has fuelled speculation his plans to boost growth could stoke inflation and push the Federal Reserve to raise interest rates more rapidly than anticipated.
Interdealer brokers, which match buyers and sellers of currencies, bonds and other tradeable instruments, have benefited from higher volatility following unexpected changes in global politics in 2016, including Britain's vote to leave the EU.
This marks an improvement for a sector where trading volumes had shrunk as interdealer brokers were hit in recent years by regulation designed to rein in the riskier trading activities of their traditional investment bank clients.
Some products, such as interest rate derivatives, have also been weak since the financial crisis as yield curves in developed markets have progressively become lower and flatter.
In January, TP ICAP also credited Trump's victory and speculation over higher interest rates for a surge in trading volumes.
However, NEX said on Wednesday that volumes in January were generally more muted.
"It is still too early to assume with any confidence that the previous and prolonged period of subdued market conditions has come to a permanent end," Chief Executive Michael Spencer said in a statement.