Each executed interbank deal constrains the terms of subsequent trades

Evidence

Finally, a more hidden reference to the global character lies in the exchange rates of line 4. The “6267” message globally sets the exchange rate for interbank dollar–Swiss franc trading on this day at this particular point in time. The deal at this rate constrains and, to some degree, selects the terms of the next trade of dollars against Swiss francs; market participants see the rate on the GB1 intranet or learn about it indirectly, from the electronic broker who indicates the price at which the last deal was made, and the market participants construe the next price according to this rate. — Karin Knorr Cetina & Urs Bruegger, Global Microstructures, 110

Categorization

• XREF: Echoes the reader’s finance canon on order flow and price formation — the idea that executed rates actively select the next price is a micro-mechanism of market reflexivity.
• CANDY: Nice cocktail fact: a single interbank deal at one rate constrains what the next trader can quote.