Bond market operator Tradeweb has reported its total trading volume for December was US$18.2 trillion across its marketplaces for rates, credit, equities and money markets. Average daily volume (ADV) for the month was US$834.5 billion, an increase of 28% year on year (YoY).
For the whole year, Tradeweb’s ADV was US$838 billion, up 15.3% YoY in 2020, with total annual volumes of US$211.2 trillion.
Tradeweb reports its fully electronic trading captured 10.6% of US investment grade TRACE and 4.5% of US high yield TRACE in December.
For the fourth quarter of 2020, Tradeweb reported record ADV of US$897.9 billion, up 30.9% YoY.
Lee Olesky, Tradeweb’s CEO, said, “A strong December capped off a record quarter for Tradeweb, with all of our asset classes contributing. While our volumes in 2020 were impacted by a variety of factors including remote work, massive debt issuance and periods of market volatility, our fourth quarter success was clearly driven by broader adoption of electronic trading tools and protocols. We believe this trend towards more electronic trading will continue into 2021.”
For the fourth quarter of 2020, Tradeweb reported preliminary average variable fees per million dollars of volume traded of US$2.51.
In December, US government bond ADV was up 27.5% YoY to US$92 billion, and European government bond ADV was up 21% YoY to US$20.4 billion. The firm reports that trading activity in US Treasuries continued to be supported by growth in execution via firm streams as well as new client acquisition. Higher global government bond issuances continued to support robust secondary trading, while a clearer outlook regarding the COVID-19 vaccines, the U.S. election, and Brexit also contributed to heightened activity.
Mortgage ADV was up 23.7% YoY to US$183.4 billion as low mortgage rates continued to support new home sales and refinancing activity continued to drive origination, furthering trends that began this past summer.
Rates derivatives ADV was up 14.6% YoY to US$195.8 billion. Tradeweb reports that global swaps market share, based on estimates by Clarus Financial Technology, continued to increase, driven by gains in trading of swaps ≥1 year as growth initiatives such as trading via request-for-market (RFM) and emerging market (EM) swaps continued to see more traction. Trading of alternative risk-free rates also saw solid growth.
US credit ADV was up 28% YoY to US$4.3 billion and European credit ADV was up 22.7% YoY to US$1.2billion. TRACE investment grade market share was 19.3% (10.6% fully electronic) and TRACE high yield market share was 6.9% (4.5% fully electronic). Credit derivatives ADV was up 2.5% YoY to US$5.2billion.
In repurchase agreement (repo) trading, ADV was up 50.4% YoY to US$304.5 billion, while retail money markets activity remained pressured by the low interest rate environment.
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