Module 5 • International Financial Hubs

“Follow-the-sun” trading: liquidity hands off across time zones. Click a hub to see what trades, how it works, and why the hub matters.

FX • Rates • Equities • Commodities • IPOs Skill: match product → players → infrastructure
Theme

Big idea: hubs are “market machines”

A hub combines liquidity, rules + trust, infrastructure, and time-zone advantage.

London Cross-border hub: FX + derivatives + clearing.
New York Equities + USD capital markets + huge investors.
Asia hubs Tokyo, Hong Kong, Singapore, Shanghai — handoff flow.
Regional hubs São Paulo, Toronto, Sydney — domestic depth + global links.
Student challenge (2 minutes)
If a firm needs to hedge USD/JPY exposure and issue bonds, which hubs are most useful and why?
Show answer
Best hubs (teaching answer):
  • Tokyo — deepest JPY institutional base; strong for JPY bonds and JPY rates/FX execution in Japan hours.
  • Singapore — Asia treasury hub; strong for FX swaps/forwards and coordinating hedges across Asian time zones.
  • Hong Kong — strong regional capital-markets + banking network; useful if firm has broader Asia investor distribution or China-linked flows.
Key logic: choose the hub with (1) the natural investor base for the bond currency and (2) the deepest derivatives liquidity for the hedge.

24-hour global flow (animated globe)

Lines brighten when regions are most active. City names appear directly on the globe.

UTC 00:00 • Asia session
Active window highlights: Tokyo → Shanghai/HK/Singapore → London → New York

Hub snapshot

Click a hub to load details.

Mini-question
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Fast comparison table

Use this for quick in-class “who wins at what?”

Hub Region Main traded “edge” Signature infrastructure Typical risk / tradeoff
London Europe FX • Swaps • Clearing LSE / LME / CCP ecosystem Dealer/OTC concentration; regulatory shifts; funding/liquidity shocks.
Singapore Asia FX • Wealth • Trade finance SGX + regional HQ cluster External-demand sensitivity; cross-border compliance; regional cycles.
Hong Kong Asia Equities • IPOs • China-linked flows HKEX Geopolitical/regulatory uncertainty; linkage risk to regional stress.
Shanghai Asia Onshore equities • Bonds SSE Policy regime risk; convertibility/capital flow constraints.
Tokyo Asia JPY rates • Institutions TSE / JPX Low-rate regime sensitivity; yen volatility episodes.
United States (NYC + Chicago) Americas Treasuries • Equities • Derivatives NYSE / Nasdaq Funding stress spillovers; policy shocks; global contagion channel.
Australia (Sydney) Oceania AUD • Pensions • Commodities link ASX Commodity cycle exposure; external demand sensitivity.
Brazil (São Paulo) Americas Rates • FX • Equities B3 Macro volatility; policy uncertainty; FX shocks.
Canada (Toronto) Americas Banks • Resources • North America link TMX / TSX Commodity + housing/credit sensitivity; spillovers from U.S. policy.

Videos

Short documentaries to anchor hub stories.

Why London is the Financial Capital of the World (2023) London
The Volatility of the Gold Market, Explained | WSJ Gold
Hong Kong's future as Asia's financial centre | FT Film Hong Kong
How a Tiny Nation Became Asia’s Financial Superpower | BUSINESS APAC Singapore
SÃO PAULO FINANCIAL DISTRICT: business center in Latin America São Paulo
Why Dubai is a Global Business Hub and Financial Centre Dubai

Class activity (fun + brief)

  1. Pick your home country hub (Canada, Australia, Brazil, etc.). What is the biggest product there?
  2. Follow-the-sun: run the globe, pause at overlaps, explain what trades “hand off.”
  3. One-minute pitch: “If I’m a multinational CFO, I use [hub] for [need] because…”
Show sample answers: (1) Home-country hub → biggest product

Teaching note: “Biggest product” means what the hub is most known for (where it has the strongest natural advantage).

Country hub Biggest product / edge (simple) Why (one line)
Canada (Toronto) Banking + TSX equities (resources/energy/mining) Big banks + commodity-linked economy + strong TSX listings.
Australia (Sydney) Pensions (“super”) + AUD markets + commodity-linked equities Huge long-term pension money + commodity cycle exposure.
Brazil (São Paulo) Local rates + inflation sensitivity + BRL FX + B3 equities Rates/FX matter a lot when inflation + policy credibility drive risk premia.
Japan (Tokyo) JPY bonds/rates + large institutional investing Huge domestic savings base supports deep bond/rates markets.
Singapore Asia FX + trade/commodities finance + regional treasury HQ Gateway hub for regional hedging + trade flows.
Hong Kong Equities + IPOs + “China gateway” capital raising Connects issuers and global investors for China-linked listings/flows.
London FX + swaps + clearing (“market plumbing”) Deep OTC derivatives + clearing + overlap with Asia and NY.
New York USD capital markets: Treasuries + equities + corporate bonds Largest investor base and deepest USD funding/issuance ecosystem.

How to write it (easy format):
“My home hub is ___. Its biggest product is ___ because ___.”

Show sample answers: (2) Follow-the-sun → what “hands off” at overlaps

Key idea: when two sessions overlap, liquidity is highest, and the same risk positions get passed from one desk to the next.

Overlap A: London ↔ New York
  • FX + swaps hedges get resized/rebalanced (EU desks → US desks).
  • USD funding ramps up: repo, Treasury trading, corporate issuance focus shifts to NY.
  • Equity index futures become US-led as NY opens (risk-on/risk-off pricing).
Student sentence: “During London–NY overlap, FX hedges and swap positions hand off so execution stays liquid and spreads stay tight.”
Overlap B: Tokyo ↔ Singapore/Hong Kong
  • JPY + Asia FX execution moves from Tokyo hours into broader Asia desks.
  • Exporter/importer hedges (forwards/swaps) get processed region-wide.
  • Asia equity flow expands from Japan into HK/China-linked venues.
Student sentence: “Tokyo starts the day with JPY; Singapore/HK take over broader Asia hedging and cross-border flows.”
Overlap C: Singapore/Hong Kong ↔ London
  • Asia risk positions move into European pricing as London opens.
  • FX hedges get rebalanced based on Europe liquidity/clearing.
  • Commodities + trade finance become more London-centered as Europe takes lead.
Student sentence: “As London opens, Asia’s hedges and risk get repriced and scaled in Europe’s deep dealer markets.”
Show sample answers: (3) One-minute CFO pitch templates

Simple pitch formula:
“If I’m a multinational CFO, I use [hub] for [need] because [liquidity + investor base + infrastructure].”

London (hedging + derivatives)
“I use London for FX hedging and interest-rate swaps because liquidity is deep and clearing/contract standards are strong, so hedges are cheaper and collateral management is smoother.”
New York (raise USD capital)
“I use New York for issuing USD bonds or equity because the investor base is massive and USD funding markets are deepest, so I can raise more capital at lower cost.”
Singapore (Asia treasury center)
“I use Singapore for Asia cash management and FX forwards/swaps because it’s a stable gateway hub with strong banks and corporate treasury networks across Asia.”
Hong Kong (China-linked equity access)
“I use Hong Kong for China-linked listings and investor access because it connects issuers and global investors through a dense banking/broker network and strong equity-market infrastructure.”
Toronto (Canada banking + resources)
“I use Toronto for Canada banking relationships and TSX equity finance because it’s the center of Canadian capital markets and is tightly integrated with North American investors.”
Educational use only. External links are provided for convenience; availability/content may change.

Quiz (quick + clean)

5 questions. Instant feedback. Designed to be fast.

Quiz score 0/5

Homework (Exit ticket • 2 minutes)

Write 4–6 sentences. Use at least two terms.

Pick one hub and explain: (1) what’s traded there, (2) why it’s a hub (cluster advantage), and (3) one concentrated risk (funding, leverage, political/regulatory risk, or liquidity shocks).

Your notes (auto-saved)

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Note: “What’s traded” is simplified for teaching and may vary by venue and market structure.