The DESK - Fixed Income Trading

Tradeweb reports US$18.5 trillion traded in September

Written by Dan Barnes | Oct 5, 2020 5:40:29 PM

Market operator Tradeweb has reported a total trading volume for September of US$18.5 trillion, with an average daily volume (ADV) for the month of US$870.5 billion, down 0.5% year-on-year (YoY), largely due to a fall in mortgage and swaps activity. For the third quarter of 2020, Tradeweb reported ADV of US$780.3 billion, which was down 4.5% YoY, with preliminary average variable fees per million dollars of volume traded of US$2.47.

The firm saw growth in credit, equities and money markets continuing in September with monthly ADV up more than 15% YoY in all three asset classes.

US credit ADV was up 33.0% YoY to US$4.4 billion and European credit ADV was up 22.1% YoY to US$1.6 billion. European credit volumes declined by 2.2% YoY to US$1.27 billion, while automated trading volumes increased via the firm’s AiEX tool and new clients continued to embrace portfolio trading.

Credit derivatives ADV was up 22.4% YoY to US$26.5 billion. Increased market volatility and market share gains, as well as semiannual rolling activity, helped boost activity to its highest levels outside of Q1 2020.

US government bond ADV was up 1.9% YoY to US$90 billion, and European government bond ADV was up 6.8% YoY to US$27.1 billion, while global government bond issuances remained elevated, supporting secondary market trading.

Mortgage ADV was down 0.5% YoY to US$196.8 billion with trading conditions mirroring those of last September when the Fed cut interest rates. Low mortgage rates continued to drive new home sales and refinancing activity continued to drive origination, furthering trends from the past summer.

Rates derivatives ADV was down 17.8% YoY to US$239 billion, with market share gains for Tradeweb helping to partially offset continued low volatility, as longer tenor swaps (over one year in tenor) remaining more resilient than short tenor swaps.

Active issuance more broadly continued to promote strong secondary bond trading across fixed income markets, while activity around September ‘rolls’ helped to buoy rates and credit derivatives monthly volume.

Repurchase agreement (repo) ADV was up 19.8% YoY to US$255.8 billion.

“Tradeweb’s strong performance in September was broad-based, spanning multiple asset classes and fueled in part by increased adoption across trading protocols,” said Tradeweb CEO Lee Olesky. “One example of that horizontal expansion was credit, where we saw greater interest and adoption in electronic portfolio trading, anonymous A2A trading and automated execution. Each offers a unique way to trade, and they all help our clients do more with less.”

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