
Buy Side Provides More Fixed Income Liquidity – Markets Media
June 17, 2016 \
13 Comments
Full Article: Markets Media
“In Europe, 55% of (MarketAxess) Open Trading volume is buy side-to-buy side and approximately 50% on a global basis. There has been a significant behavioural change but we are in the early days of buy side providing liquidity.”
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13 Comments on "Buy Side Provides More Fixed Income Liquidity – Markets Media "
Good points all … the market structure is in an unstable equilibrium .. but maybe market structures are always thus?
One clarification question .. “600mm/day is about 10% of global volume” – that would put global volume at $6B … average TRACE volume is 30B – so am missing something here? Thanks!
Sorry, for being unclear. I should have said “…about 10% of MKTX global volume”.
“in the most liquid bonds, trading participants use ECNs for micro lots, RFQ for odd lots, and voice for round lots and blocks. These solutions, for the most part, solve for immediacy and exact size. The struggle is in the large blocks and illiquid bonds.”
Pretty much a great summary of current state – question is whether there is an evolutionary path for e-Trading out of the liquid micro-lot world, or is e-Trading destined to remain just for micro-lot liquid bonds forever?
Love it!
I agree with all this– you nailed it on the head.
One more important point: Market Axess is offering a “free” pre-trade solution, wherein dealers put the interests of their buyside customers. Theoretically, they know which buyside firm is a buyer of a bond and which buyside firm is a seller of that bond– all because dealers are telling them.
So, assuming MA has a footprint with their pre-trade tool, then the dealer community is seeding Open Trading with trades. Moreover, they are paying outrageous fees for that “privilege”.
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