Market operator Tradeweb reported a total trading volume for December 2021 of US$19.9 trillion across rates, credit, equities and money markets, a decline of 17.4% on November.
Average daily volume (ADV) for the month was US$914.2 billion, an increase of 9.8 percent (%) year-on-year (YoY)
“Relative to [Morgan Stanley expectations], volumes were lighter in cash rates, rate derivatives and cash credit due to a softer than expected month of December,” noted Morgan Stanley analysts Michael Cyprys and Ian Buchanan. “Relative to consensus, volumes were lighter in cash rates and credit. Market share in US cash credit continued to expand, up 240bps y/y in IG and nearly 300 bps in HY for electronic only volumes.”
US government bond ADV was up 23.6% YoY to US$113.7 billion supported by strong client activity in institutional and wholesale markets; the continued momentum of session-based trading and streaming protocols; and the addition of the Nasdaq Fixed Income business.
European government bond ADV was up 7.4% YoY to US$21.9 billion, with Tradeweb assigning steady global government bond issuance, along with sustained rates market volatility, as supportive of trading overall.
US Credit ADV was up 12% YoY to US$2.3 billion and European credit ADV was down 9.3% YoY to US$1.1 billion.
The business attributed its continued growth in US credit as driven by further client adoption of the request-for-quote (RFQ) protocol and session-based trading, as well as Tradeweb’s electronic portfolio trading.
Reduced European client activity in late December weighed on volumes in credit and other asset classes across the platform.
For the fourth quarter of 2021, Tradeweb reported total trading volume of US$69.3 trillion and record ADV of US$1.11 trillion, up 24.1% YoY, with quarterly ADV records in US government bonds, US high yield (HY) credit, and swaps/swaptions ≥ 1-year.
Tradeweb noted that the fourth quarter of 2021 capped off a record volume year for the firm, with ADV for the full year exceeding US$1 trillion and most product groups seeing record activity. Further, it reported over US$300 billion in electronic portfolio trading volume in 2021, which was more than double that reported from the prior year.
Lee Olesky, Tradeweb CEO, said, “Tradeweb facilitated record trading volume in 2021, exceeding US$1 trillion in average daily volume and culminating with a record fourth quarter. This was a breakthrough year for us in credit, fuelled by Tradeweb’s leadership in electronic portfolio trading and other innovations such as AiEX and sweep. In rates, we became the leading electronic trading platform for US Treasuries, while interest rate volatility around the world contributed to higher volumes in government bonds and swaps globally. Looking across asset classes, trends in passive investing drove strong interest in our ETF and credit platforms, while increased automation played a powerful role in all of our markets. Most importantly, we believe 2021 represented a clear inflection point in the long-term trends towards more electronic trading.”
©Markets Media Europe, 2021
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