Tradeweb’s October volumes reflect turbulence in European and US markets

Dan Barnes

Tradeweb, the market operator across rates, credit, equities and money markets, has reported an average daily volume (ADV) for the month of US$1.05 trillion, a drop of 16.5 percent (%) year-over-year (YoY), reflecting weaker activity in US Treasury and European credit, along with the mortgage market.

Its total trading volume for October 2022 of US$21.3 trillion,

US government bond ADV was down 14% YoY to US$128.1 billion, however European government bond ADV was up 4.2% YoY – although that rose to 23.8% up YoY on a euro-denominated basis – to US$37.8 billion.

The firm reported that US government bond activity was lower YoY as industry volumes declined and while US government bond activity in institutional markets was lower, the platform saw a record in average daily trades, up 61.2% YoY, suggesting smaller trades increased significantly, and higher interest rates drove reportedly record volumes in the retail market.

Wholesale trading saw a steady volume in streams that was more than offset by an industry pullback in central limit order book (CLOB) volumes. Strong European government bond trading was driven by heightened rates market volatility and record activity in UK Gilts.

By contrast credit trading was elevated in the US but fell in Europe. Fully electronic US credit ADV was up 15.2% YoY to US$4.4 billion and European credit ADV was down 8.6% YoY although up 8.6% YoY on a EUR-denominated basis, to US$1.7 billion.

Tradeweb attributed US and European credit volumes to continued client adoption across Tradeweb protocols, with global record volume in Tradeweb AllTrade’s all-to-all offering and its second-best month in portfolio trading which contributed to US investment grade activity and strong volumes across the platform. Tradeweb’s reported share of fully electronic US high grade and US high yield TRACE was 13.8% and 6.8%, respectively.

Municipal bond ADV was up 147% YoY to US$463 million, reflecting record activity in both institutional and retail client sectors, driven by market volatility and sharply rising interest rates.

Credit derivatives ADV was up 39.3% YoY to US$15.9 billion, while total rates derivatives ADV was down 44.3% YoY to US$273.6 billion.