Corporate Bond Volume Doesn’t Mean Corporate Bond Liquidity – BondCliQ Institutional Market Monitor
A bird’s eye view of transaction data in the US corporate bond market indicates an increase in trading activity since the start of the COVID-19 market panic in the US (2/24/20). The ADV of the 35 trading days before 2/24 (pre-COVID-19) was $35bn. Post COVID-19 (2/24 to 3/11), corporate bond market ADV is ~$55bn, a 53% in daily transaction volume.
Given these numbers, it would be natural to assume that liquidity is abundant, however, a closer look at detailed transaction data tells a different story.