The US corporate bond market in July saw increases across nearly all the metrics tracked by Coalition Greenwich, with average daily notional volume (ADNV) for both investment grade and high yield up 24% year-over-year (YoY).
For investment grade alone, ADNV in July was up 27% YoY. Average daily trade count was up 18% YoY and average daily trade size was up 8% YoY.
Electronic ADNV for July was up 29% YoY and new issuance jumped 40% over the same period.
For high yield, ADNV for high yield in July was up 13% YoY, while average daily trade count dropped 4%.
Average daily trade size was up 18% YoY, electronic ADNV was up 21% and new issuance in high yield was up 40% YoY.
The total market recorded a 64% YoY increase in primary dealer net positions in July.
Kevin McPartland, head of research for market structure and technology at Coalition Greenwich, said, “While the US Treasury markets remain the centre of fixed income trading attention in 2024 because of both rate-cut expectations and equity market volatility, corporate bond market activity continues its upward trend across nearly all the metrics we track.
“Primary dealers are signalling they are less worried about corporate bonds losing value in the short term, with net positions up 64% year over year. The willingness to hold corporate debt is also likely helping overall market liquidity, which, in turn, keeps volumes up.
“In other words, despite the increase in agency trading in the corporate bond market, dealer willingness to buy and hold bonds to facilitate client orders is still a net positive for the market,” McPartland added.
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