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Tradeweb see US credit volumes jump while European credit falls

  • September 8, 2022

Market operator Tradeweb has reported overall trading volumes of USUS$23.4 trillion in August 2022, with average daily volume (ADV) for the month across assets at USUS$1.02 trillion, an increase of 13% year-over-year (YoY) with volumes on an upward trend.

US government bond ADV was reported up 0.7% YoY to US$124.2 billion, and European government bond ADV was up 22.7% YoY (up 42.2% YoY in EUR terms) to US$27.5 billion.  

The firm attributed this to client engagement in US government bonds across institutional and wholesale markets remaining high, while higher interest rates drove strong growth in the retail market. European government bond trading remained elevated amidst heightened rates market volatility.  

Mortgage ADV was down 7.9% YoY to US$157.1 billion, as risk-off sentiment and declining issuance weighed on trading activity and sector performance.

Swaps/swaptions ≥ 1-year ADV was up 34% YoY to US$169.4 billion, and total rates derivatives ADV was up 26.4% YoY to US$283.5 billion. Swaps/swaptions ≥ 1-year volumes were supported by trading in global inflation swaps, strong activity in emerging markets swaps, increased engagement from international clients and robust client interest in the request-for-market (RFM) protocol. Ongoing market focus on evolving central bank policy continued to buoy overall market activity. 

Fully electronic US Credit ADV was up 14.8% YoY to US$3.5 billion and European credit ADV was down 9.6% YoY (up 4.8% YoY in EUR terms) to US$1 billion.  According to Tradeweb, US and European credit volumes reflected continued client adoption across all of its protocols, including request-for-quote (RFQ), Tradeweb AllTrade, sessions-based trading and portfolio trading. US investment grade activity was buoyed by a pick-up in sessions-based trading and voice trade processing, while heightened volatility weighed on overall market activity in US high yield (HY) and European credit. Credit derivatives ADV was up 95% YoY to US$11.4 billion as credit risks increased and economic uncertainty continued, leading to market-wide volatility which continued to boost volumes overall.  

Speaking to analysts earlier sin the year regarding the firms results in the first half of the year, CEO Lee Olesky had said, “Seven years into our journey, it's amazing to see the sustainability of the business despite tough client conditions and lacklustre corporate credit industry volumes. We are continuing to see growing institutional client demand with users, increasing across Munis, portfolio trading, AllTrade, net spotting and growing wholesale adoption session trading and ReMatch. Looking ahead, we continue to see a lot of opportunity in credit as our platform continues to scale and the retail business continues to recover.”

Municipal bonds ADV was up 100.3% YoY to US$345 million (mm), with municipal volumes remaining at high historical levels, reflecting Tradeweb’s second-highest month in institutional trading activity and a resurgence in retail trading activity. Market volatility and rising interest rates continued to boost volumes overall.

The firm saw US ETF ADV up 20.2% YoY to US$5.3 billion and European ETF ADV was up 36.4% YoY (up 58.1% YoY in EUR terms) to US$2.2 billion.  An increase of 69.0% YoY in global institutional client activity was driven by further adoption of RFQ and sustained market volatility. 

Repurchase Agreement ADV was up 16.7% YoY to US$369.6 billion, with reported increase client adoption of Tradeweb’s electronic trading solutions driving global repo activity, even as elevated usage of the Federal Reserve’s reverse repo facility continued to weigh on the overall repo market. Retail money markets activity continued to strengthen as the rates environment improved.