Where a spread actually comes from
The spread you see is the gap between the best bid and the best ask that liquidity providers are currently willing to honor. It is not set by a dial in someone's office. When many providers quote aggressively and in size, the gap compresses. When they step back, it opens. A quiet London morning on EUR/USD and the minute after a rate decision are the same instrument in two different liquidity regimes, and the spread is simply the honest readout of which regime you are in. Everything about news spreads follows from that one mechanic.
What happens at a release
Seconds before a scheduled release such as CPI or nonfarm payrolls, market makers face a simple problem: the next print can move the market violently in either direction, and any quote they leave resting is a free option for someone faster. Their rational response is to quote wider, quote smaller, or pull quotes entirely. Depth thins, the top of the book widens, and a pair that traded at 0.3 pips all morning can flash to several pips for a few seconds.
The same thinning happens on a schedule every day at session boundaries. The hour around the New York close and the daily rollover sees many desks briefly step away, which is why spreads routinely widen at that time even with no headline in sight.
What widening does and does not mean
A widened spread at news is normal market behavior, not evidence that a firm is manipulating your feed. What is worth comparing is how much each feed widens and how quickly it recovers, because that varies with the quality of the liquidity behind it. This is one reason the board flags widening events instead of hiding them, and ranks firms over a rolling fifteen minute window rather than on single ticks. One extreme second should not crown or sink a firm, but a feed that stays wide for minutes after every release will show up in its average.
Practical takeaways
Know the calendar, and assume the quoted spread is unreliable in the seconds around a major release. If you trade news deliberately, budget for a wider spread and slippage as part of the plan rather than a surprise. If you do not, simply waiting a minute or two after the print usually returns you to normal pricing.
And when you compare firms, compare them in the conditions you actually trade. A desk that is tightest at quiet mid-session may not be the one that behaves best at the moments you care about.
Figures referenced in this guide are indicative snapshots from connected feeds, not tradable quotes. See the methodology for how they are made.
Next: What a spread really costs you