Average daily notional volume (ADNV) in US rates trading rose by 14% year-on-year (YoY) in November, reaching US$953 billion. This marks the most electronic quarter since Q4 2022, according to Coalition Greenwich.
The US election pushed up dealer-to-client e-trading, which rose by four percentage points YoY to 65%. Similar growth was seen in the dealer-to-dealer market, where the percentage of volume e-traded jumped from 51% to 59% YoY. Overall e-trading was up six percentage points YoY, reaching 62%.
On a quarterly basis, US Treasury e-trading was up by five percentage points to 66% in the dealer-to-client market, and up four percentage points to 59% in the dealer-to-dealer market.
Growing e-trading volumes were accompanied by a significant drop in volatility. The MOVE Index fell by 28% from 132 to 95 over the month, with Coalition Greenwich reporting that industry professionals believe they now have a clearer picture of government policy expectations going into 2025.
Under incoming SEC commissioner Paul Atkins, dealer registration requirements are expected to be disregarded. A reduction or rejection of the initiative to have Treasury trading services registered as alternative trading systems or exchanges is also anticipated, while the proposed best execution rule is expected to be tabled.
The implementation of mandatory clearing for US Treasury and US Treasury repo transactions remains a key issue, the report said.
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