J.P. Morgan: Brooke Bauer on the future of rates execution

April 7, 2026

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Brooke Bauer, Head of Americas Rates & Repo Electronic Sales at JP Morgan, speaks to Trader TV and Traders Magazine about the parallels and differences between FX and rates markets. Bauer discusses the rise of new trading venues, and how innovations in direct APIs, streaming protocols, and data analytics are reshaping market structure as rates shift to more electronic and algorithmic trading.

Interview:

Terry Flanagan – FX and interest rates are closely linked, and you have a deep background in both markets. At a high level, how would you compare rates and FX? What are the similarities and what are the differences?

Brooke Bauer – Yeah, and just some context, I started working in FX back in January 2008 at a time when it was virtually all voice execution, and I’ve seen the development over time of electronification, and what it can do and how it can change markets. Coming into the rates world at the end of last year, one of the things that stood out to me the most was where the two differ in terms of the different protocols. So from an FX perspective, the market’s dominated by stream execution and a lot of direct connectivity. So we have our biggest venues, which are a direct APIs (application programming interfaces) and also our single dealer platform Execute, by far, it’s almost 50% of our flow. Whereas when you look at the rate side of things, it’s very much an RFQ (request for quote) model, where the flow is taking place on a few select venues. Also, from even an algo execution perspective, we’ve had algos since 2013; we didn’t have a treasury algo until 2022. A lot of that’s dependent on external markets and ECNs (electronic communication networks), and where we can source liquidity, and that is evolving on the right side over time. But when you think about where we are in an FX world, where there’s probably 30 plus ECNs, there’s really only a handful within the rate space. So it’s interesting to see the differences between the two. I will say at the end of the day, the main way that we exit risk as a bank is through internalization and matching of client flows. And that absolutely remains the same between both sides, and if anything, we’ve been able to leverage best practices across the asset classes to optimize the execution for clients.

Terry Flanagan – The FX market has become more fragmented. In fact, one of the main themes of this year’s Trade Tech FX is generating alpha in times of market fragmentation. How are you seeing this fragmentation play out, and what are the implications for market participants?

Brooke Bauer – So the biggest ways that the market has fragmented, I would say, have been from a venue, execution standpoint. So there are a lot of new players who have come to the space. A lot of them are leaning on streaming protocols and cross-asset execution, and a lot of them are focused on lower execution costs, and that’s something that both the banks and the buy side are interested in. The other aspect of fragmentation comes from more of an interbank ECM perspective. I’ve seen a lot of growth from a mid-book dark pool perspective. In the equity space, there are probably 15-plus venues that do dark pool execution, and in FX, there’s a handful, and I expect that to grow over time. I mean, you have the likes of OneChronos, who’s bringing that option means of executing that’s in equities into FX, they’re coming into rates as well. So I think we’ll see a lot more innovation in this space, which is exciting.

Terry Flanagan – You’ve mentioned streaming protocols, where buy-side firms can access bank liquidity directly via API’s are gaining traction. What’s important about this market structure development?

Brooke Bauer – Yeah, streaming protocols are absolutely the way of the future. I mean, when we look at what’s happened in FX. The majority of the flows that we’re seeing in the span of the NDF front are being done using streaming protocols, and it’s largely being done on a direct basis or through low-cost aggregators. In the rate space, this has been, I’d say, slower to move. People are still very much relying on the RFQ (request for quote) models. And what’s actually been interesting is we’ve seen a combination by some venues to include streams with RFQ protocols altogether as one. One of the benefits of streaming a protocol is that the only people that know about the trade are the two participants in the trade, whereas when you RFQ, there’s a lot of potential market info that’s getting out there to the broader audience. So I absolutely think you’re going to see more people leaning into this, whether that’s using, again, these low-cost aggregators, or even coming direct to the banks, if they have enough critical mass

Terry Flanagan – Algorithmic trade execution has been prevalent in FX for some time now. It’s less so the case in rates, but it is catching up. What is the future of algo execution in the rates world?

Brooke Bauer – Yeah, we’ve seen a huge amount of growth in the algo space, really, since Covid happened. In March 2020, you had a dynamic where spreads were blowing out, and people were looking for ways to capture that spread and have more control over the execution. And alongside that, you’ve had a big increase in the amount of analytics and tools that are available for participants when they’re running algos. So whether that’s looking at an app that’s giving you pre trade or getting post trade analytics from a third party provider that’s giving you a ton of data, all this is really arming people to use these algo tools and be able to present back to their internal teams the value that the algos are bringing in the rate space, this is something that we’re absolutely seeing growth in what’s helping is that historically, we only could provide access through direct means, but now we’re seeing third-party providers also have algo execution, so a lot more people are getting involved and experimenting with these tools when we build the algos and rates, we’ve been taking what’s been popular in other asset classes. So our Adaptive has been our flagship strategy in FX. We have the Adaptive in rates and we do this because we know that clients have the same kind of needs in both asset classes, and we try to leverage what works with one for the other. And I think that will continue to evolve over time. From a rates perspective, where I think makes this really take off is adding additional product. So we’ve had a lot of demand for spreader-type access, so cash, cash and cash futures. Right now, it’s very limit based in terms of what’s out there, but we would love to bring an opportunistic algo like the adaptive into an area like that.

Terry Flanagan – Finally, Brooke JP, Morgan is hosting a lunch workshop today at Trade Tech FX. Tell us a little bit of the workshop and the main themes you expect to cover.

Brooke Bauer – I’m excited to present today and see all our clients in the closed-door session. Really, the main themes are going to be around using data, specifically simulated data, to look at past performance, but then also pull in real-time market analytics to make decisions around speed to optimize that. So we’re rolling that out as part of our Adaptive 3.0 strategy. The second big piece is around internalization, which remains the core of, I would say, our value add to clients, and we’re just expanding the ways that our algos will use our internal franchise so people can essentially make more of their interest into different parts within the spread and increase the amount of connectivity with us. And then, finally, we’re looking at leveraging futures along with OTC (over the counter) liquidity so that we can optimize execution, but then potentially lower margin costs by booking trades as a future, for example, and offsetting with other risk in a portfolio. So yeah, I’m excited to present and look forward to hearing the client feedback.