Electronic bond market operators saw a new boost to volumes in March, and in the first quarter more broadly, as volatility in capital markets challenged price and liquidity formation.
In March, MarketAxess reported US$296.3 billion in total credit trading volume which it noted was a record level, with US$12.9 billion average daily volume (ADV), up 4% year-on-year (YoY).
It also saw a boost to Open Trading, its all-to-all trading protocol, with a 5% increase in US investment grade (IG) ADV to US$6.1 billion. US high-yield ADV had a 14% increase to US$1.8 billion.
The firm reported its estimated price improvement for clients using Open Trading was approximately US$100 million, and average estimated price improvement per million was US$976.
MarketAxess also reported a record of US$14 billion in portfolio trading volume, up 200% from $5 billion.
In Q1 it further reported record US$13.7 billion in total credit ADV, up 14%, with total trade count up 26%.
Chris Concannon, CEO of MarketAxess, commented, “In March we generated record total credit trading volume of $296 billion, with strong increases in average daily trading volume across high-yield, Eurobonds and municipals, driven in part by continued strong levels of estimated market share gains across most product areas. Market volumes were dampened by challenges in the banking sector, with U.S. corporate credit average daily volume dropping 10% intra-month during the crisis period. The scarcity of liquidity during the month drove record Open Trading penetration of 39%, reflecting the power of our differentiated liquidity pool.”
Tradeweb saw fully electronic US credit ADV up 18.2% YoY to US$4.4 billion, and it observed that strong US credit volumes reflected continued client adoption across Tradeweb protocols, including request for quote (RFQ), Tradeweb AllTrade and portfolio trading.
European credit ADV was down 14.9% to US$1.8 billion, as heightened market volatility weighed on European credit volumes.
Municipal bonds ADV was up 6.3% YoY to US$285 million, which Tradeweb reported was reflecting healthy institutional and retail client activity. Market volatility and elevated interest rates continued to boost volumes overall.
Credit derivatives ADV was up 11.9% YoY to US$39.4 billion, with semiannual rolling activity as well as market-wide volatility continuing to boost volumes overall.
Across markets, Tradeweb saw average daily volume (ADV) for the month was a record US$1.51 trillion, an increase of 23 percent YoY and for the first quarter of 2023, total trading volume was US$85.3 trillion and ADV was a record US$1.36 trillion, an increase of 16.2% YoY. Average daily trades for the month totalled 138,733.
Trumid, reported its March ADV for credit was ADV of US$3.2 billion, up 43% YoY. It also noted that over 1,000 users traded on the platform for the third month in a row Q1 2023, as continued e-trading adoption and engagement by market participants, including alternative liquidity providers, led to the growth of Trumid’s client network to more than 720 buy -and sell-side institutions.
Reported traded volume grew 81% year-over-year, with record overall market share, up 63% compared to Q1 2022.
“Momentum from 2022 continued into the first quarter with strong liquidity breadth and depth across the platform. A record number of users executed a trade each day in Q1, and the number of unique bonds traded daily almost doubled YoY” the firm wrote. “Trumid’s market share in new issue bonds grew by almost 30% year-over-year. Close to 900 traders transacted in new issue trading on Trumid, with grey market trading representing a quarter of all new issue volume.”
©Markets Media Europe 2023
