Connectivity into and out of Brazil was enhanced significantly earlier this year, with the launch of the new EllaLink subsea cable. Running between Fortaleza in northeastern Brazil and Sines in Portugal, EllaLink is now the fastest trade link between Brazil and Europe, cutting round-trip delay (RTD) times by more than 50ms, compared with transatlantic bridges via North America. We look at the growing impact of EllaLink on the Brazilian market.
Until recently, European and Asian firms wanting to trade the Brazilian markets have had to go through the US, and many have held back because of the latencies associated with those routes. With the launch of EllaLink [link to reputable news source], trading strategies in Brazil and South America that were previously uneconomic for international players are now looking much more attractive.
Why the EllaLink cable is great news for B3
This is great news for B3 (Brasil, Bolsa, Balcão), the largest exchange in Latin America, which is now on a major drive to extend its market overseas, not only into the main European trading centres of London and Frankfurt but also out to Singapore, Tokyo, Hong Kong and Shanghai. And earlier this year, B3 launched high-density racks at its São Paulo data centre, specifically targeting the low-latency electronic trading community.
BSO has been working closely with both B3 and EllaLink at a strategic level, to put in place the necessary ultra low latency connectivity and infrastructure that will enable trading firms from around the world to access the exchange and to capitalise on the opportunities that it offers. For example, we are now establishing direct links between B3-LD4, B3-FR2, B3-SGX and B3-TY3, which will augment our existing routes out of Brazil into North America (B3-NY4 and B3-CME, via Seabras-1). We are also investing in the low fibre infrastructure, switching technology equipment and high-performance monitoring devices, either side of the EllaLink cable.
Low latency routes for the Brazilian market
These new low latency routes will open up a wide range of new possibilities for proprietary trading firms, capital banks, hedge funds and other market participants, across multiple asset classes. One area where we are seeing growing interest in the Brazilian market, for example, is commodities trading between Brazil and Asia, particularly China. Brazil is the world's largest exporter - and China the largest importer - of soybeans, and a new index was recently launched, the SAFRAS CTDI Brazil Soybean Index, to provide greater price transparency in this contract. Singapore is another region where Brazil is attracting increasing interest.
New opportunities arising from our work with EllaLink and B3
As the preferred supplier for EllaLink in the capital markets sector, with our experience in emerging markets, and with our extensive expertise in delivering the ultra-low latency connectivity and infrastructure that underpins our customers’ electronic trading networks around the globe, BSO is well-placed to ensure that firms who want to access the Brazilian market have everything they need.
At BSO, we recognise that trading firms are always looking for new opportunities outside of the highly competitive, large exchanges. With the launch of EllaLink, and with the initiatives that B3 is undertaking to attract global players into its market, our customers are excited about the possibilities on offer.
These initiatives are a prime example of how BSO is working with exchanges, suppliers and customers to bring the global financial communities together. We use our experience in building products and services that allow trades to happen that aren't yet happening.
Learn more about BSO’s mission and explore our ultra-low latency solutions to see how we’re enabling the lowest achievable latencies between global financial markets. Feel free to reach out to the BSO team.