By Linda Coffman, EVP, Smart Data
Walking out of the FIA IDX commodity markets sessions this June, one thought kept surfacing: the industry is not short of signals. What it lacks is the infrastructure to act on them quickly enough.
Two sessions stood out. The first was a keynote by Spencer Dale, former Chief Economist at BP and now at the London School of Economics, who framed the macro forces driving commodity volatility with the kind of long-range clarity that is rarely heard on a conference floor. The second was a panel of exchange leaders and market participants working through the immediate consequences of geopolitical disruption on energy, metals, and agricultural markets. Together, they painted a picture of an industry under structural pressure from several directions at once, and quietly converging on some of the same answers.
The macro backdrop
Dale’s keynote cut through the noise of current events to make three arguments worth sitting with. First, energy security has moved from a policy consideration to a top-tier investment priority. Governments and corporates alike are restructuring supply chains and capital allocation around it, not as a short-term response to Russia-Ukraine or the Strait of Hormuz closure, but as a durable strategic shift.
Second, AI is beginning to register meaningfully on global energy demand, with real consequences for grid planning. The buildout of AI infrastructure is not just a technology story; it is an energy story, and the two are becoming inseparable. Interestingly, that same buildout is prompting some firms to revisit their cloud strategies and move data back on-premises, where energy costs and data sovereignty can be managed more directly.
Third, the energy transition is real but non-linear. The speed of change is frequently overstated in some areas and underestimated in others. For anyone managing commodity exposure or reference data across energy markets, that unevenness is itself a risk factor.
Where money is moving and why
The panel brought the macro picture down to market level. Gold repatriation was a recurring theme: central banks and sovereign holders are moving reserves out of the UK and US, citing geopolitical risk and a preference for direct custody over physical assets. US banks, meanwhile, are growing euro market share as European market stability becomes comparatively attractive during periods of global stress.
The structural implication is that capital is not just moving in response to events; it is repositioning around new assumptions about where reliability lives. For European markets specifically, panellists noted that mobilising the large pool of European household savings into capital markets could be a meaningful lever for competitiveness, but that it requires coordinated regulatory effort, not just political will.
Europe is centralising, slowly and carefully
On regulation, the conversation was candid about the distance between intent and implementation. There are active proposals to ease market maker requirements so that US and UK participants can operate more easily in Europe, which reflects a pragmatic recognition that liquidity needs infrastructure, and infrastructure needs scale.
More significantly, there is renewed momentum behind a centralised European regulatory body under ESMA. The logic is sound: fragmented supervision creates arbitrage, raises compliance costs, and slows market development. But implementing centralised oversight remains a delicate balance between pan-European consistency and national authority. Several panellists were sceptical that the political will exists to close that gap quickly, even if the technical case is clear.
The real constraint is not data, it is proximity to the decision
The technology section of the panel was, frankly, the most directly relevant to what we think about every day at Smartstream. Two themes dominated.
On AI, the point was made plainly: the constraint is not data availability. The constraint is using data to drive earlier decisions. AI needs to sit closer to the decision point, and that becomes possible as controls and governance frameworks mature. That framing aligns closely with what we hear from clients. The firms making meaningful progress are not the ones with the most data; they are the ones who have reduced the distance between their data and the moment it needs to inform action.
On tokenisation, the panel was equally direct. Without tokenised securities, 24×7 markets create accuracy problems that make round-the-clock operational support impractical. Tokenised assets will sit alongside traditional securities, materially changing how firms manage collateral requirements in a continuous trading environment. This is not a distant prospect. The infrastructure decisions being made now will determine which firms are positioned to support it.
What’s driving the next structural shift?
The final strand of the panel covered emerging product types, and the geographic unevenness of their development. Prediction markets tied to securities are gaining ground among traditional exchanges, particularly in the US, where perpetual futures are now permitted. Europe and the UK are moving more slowly, though panellists expected that gap to narrow.
Crypto is perhaps the most pointed example of retail driving institutional change, rather than the other way around. Investors want to trade cryptocurrencies the same way they trade traditional securities. That expectation is not going to recede, and the infrastructure gap it exposes is real. The firms that treat this as a distinct asset class problem, rather than a reference data and operational problem, are likely to underestimate what is actually required.
Reference Data for Markets That Don’t Stand Still
Across all of these themes, one common thread is the quality, timeliness, and governance of reference data. Whether the context is gold repatriation, AI-driven decision-making, tokenised collateral, or crypto onboarding, the operational foundations are the same: accurate instrument data, reliable pricing, and the ability to act on it without friction.
Smart Data is Smartstream’s reference data management solution , built to give financial institutions the data quality and control they need to support complex, fast-moving markets. In a year when the macro picture is shifting as quickly as it has been, that foundation matters more, not less.
If you would like to discuss how Smartstream can support your reference data operations in this environment, get in touch.
