Liquidnet’s research reveals liquidity conditions improving

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A survey of US and European bond traders has revealed that the liquidity in the fixed income markets is improving.

The research, published by the block-trading market operator Liquidnet, found more than 50% of respondents believed liquidity conditions were better compared to a year ago, and half of those surveyed reported an increase in fixed income electronic trading in the past year. These positive market conditions were further reflected with 54% indicating that peer-to-peer platforms were complementing existing workflows.

The ‘Fixed Income Institutional Voice Survey’, which covered US and European institutional traders revealed that only 25% of US-based traders are aware of their firms’ MiFID II plans, with only 39% believing MiFID II will send more corporate bond trading to electronic venues.

Over 91% of European respondents were aware of their firm’s MiFID II plans, aligning with 86% of European traders believing the regulation will send more corporate bond trading to electronic venues.

More than half of all respondents (58%) indicated that OMS integration was an important factor when selecting a trading venue.

“With regulators now attempting to force a much greater level of transparency, traders are concerned about the impact on liquidity sourcing, especially when getting large trades done,” says Constantinos Antoniades, global head of Liquidnet Fixed Income. “Buy-side traders are turning to solutions like Liquidnet that are providing access to natural liquidity alongside data analytics tools required for best execution audit trails.”

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