Tradeweb sees volume drop in June

Dan Barnes
Lee Olesky, CEO, Tradeweb

Bond market operator, Tradeweb, has reported its average daily volume (ADV) in June was US$780.9 billion (bn), a decrease of 8.9% year-on-year (YoY), largely led by a drop in interest rate derivatives and mortgage trading. However, its second quarter ADV was up 3.5% YoY to reach US$778.4bn.

Lee Olesky, Tradeweb’s CEO, said, “While historic interventions of central banks globally certainly calmed volatility across rates trading, activity remained high on Tradeweb platforms and June capped our best half of a year ever for volumes. Our clients want to do more electronically, and the diversity of our business across products and geographies was built to serve this demand.”

Tradeweb ADV in H1 2020 was US$837.5bn, beating the prior six month record of US$752.3bn set in H2 2019.

Trading of global cash credit on the platform had a record ADV of US$8.1bn in June and a quarterly record of US$7.8bn. Electronic portfolio trading, which Tradeweb was the first to launch in January 2019, has now facilitated more than $100bn in volume traded globally since launch, with more than US$60.3bn traded so far this year.

Tradeweb saw emerging markets trading reach US$3.6bn ADV over the quarter led by exceptionally strong emerging market swaps volumes with a significant number of new counterparties trading.

US government bond ADV in June was up 11.4% YoY to US$95.9n, and European government bond ADV was up 10.0% YoY to US$28.1bn. Issuance remained high to support announced global stimulus programs and there continued to be robust trading in bills markets.

Mortgage ADV was down 10.5% YoY to US$168.4bn, with rates remaining relatively range bound, mortgage trading moderated from recent highs. Year-on-year performance was impacted when compared with June 2019 activity when rates volatility spiked. Trading in specified pools continued to grow with the addition of new participants.

Interest rate derivatives ADV was down 31.5% YoY to US$204.7bn, with swaps activity declining as rates volatility across the curve calmed, especially in comparison to June 2019 when rates volatility spiked. Activity for short-tenor swaps (<1 year) was softer as a result of reduced portfolio compression activity.
In addition to high trading in emerging market swaps, Forward Rates Agreement (FRA) risk mitigation trading continued to see further adoption.

US credit ADV was up 56.1% YoY to US$5.1bn, and European credit ADV was up 2.4% YoY to US$1.4bn. Tradeweb reports that volumes traded anonymously by institutional clients on an all-to-all basis reach record levels. In addition to portfolio trading records, strong demand for multilateral net spotting helped drive higher volumes in US high-grade trading.

Credit derivatives ADV was up 27.2% YoY to US$10.8bn, with credit derivative volumes buoyed by market uncertainty.

Repurchase agreement (repo) ADV was up 11.9% YoY to US$238.6bn, with bilateral repo activity setting a new record, and new dealers and participants continuing to grow in number.

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