Bond market operator MarketAxess has announced that Goldman Sachs has committed to become a dedicated market maker and is actively contributing streaming prices for US investment grade corporate bonds to the MarketAxess Live Markets order book for institutional credit markets.
Live Markets uses the anonymous all-to-all Open Trading marketplace to give a view of two-way, actionable prices for the most active US investment grade bonds, including on-the-run recently issued debt, benchmark issues and news-driven securities.
Amy Hong, head of market structure for the Global Markets Division at Goldman Sachs said, “We are excited to help pioneer fixed income market innovation with MarketAxess. By connecting our systematic liquidity to the Live Markets order book, we aim to evolve liquid corporate bond markets toward greater pre-trade price transparency and execution certainty.”
Volume conducted via Open Trading grew to $643 billion in the first three quarters of 2020, up 60% from the same period the prior year, according to MarketAxess and represents 32% of the firm’s total global credit trading volumes.
Richard Schiffman, head of Open Trading with MarketAxess, said, “We’re thrilled to be working with Goldman Sachs which shares our belief in driving innovation and efficiency through technology.”
The firm estimates that Open Trading drove transaction cost savings of US$852 million for both liquidity takers and liquidity providers in the first three quarters of 2020. Estimated liquidity taker cost savings is defined as the difference between the winning price and the best disclosed dealer cover price. Estimated liquidity provider cost savings is defined as the difference between the winning price and then current Composite+ bid or offer level – offer if the provider is buying, bid if provider is selling – at the time of the inquiry.
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