Tradeweb sees volume growth across 2020

Darren Sinden

Tradeweb said that turnover in US government bonds, across 2020, was up by 27.50%

Bonds

Tradeweb markets, a company which operates electronic fixed income, credit, money market and equity trading platforms has published turnover figures for the month of December and full-year 2020.

The numbers show that the move to zero and in some cases, negative interest rates. didn’t dent traders appetites in these markets over the course of 2020. Tradeweb reported December trading volume of $18.20 trillion and an average daily volume over the month of $834.50 billion,

In the fixed income segment, mortgage-backed securities were the most active product on Tradeweb platforms with an average daily volume of just over $197 billion worth of business and annualised volumes of just under $50.0 trillion. Those gains represented growth of 23.7% year over year.

US government bond trading volumes were also higher than those seen in 2019 by an average of almost $11.0 billion per day. Tradeweb said that turnover in US government bonds, across 2020, was up by 27.50%

US treasury bonds were also much busier than their European counterparts over Tradeweb, with average daily volumes of a little over $91.0 billion in the US securities and just over $26.0 billion in the European paper. Though European government bond volumes on Tradeweb still grew by 21.0% compared to 2019.

In the credit markets, US high-grade trading accounted for more than half of Tradeweb’s average daily turnover of $7.611 billion. The high quality US debt and obligations turned over 4.12 billion per day.

Once again the US market was far more active than European names which traded just $1.458 billion of average notional value per day across the year. US credit trading grew by 28.0% and European credit by 22.7% when measured against Tradeweb’s 2019 turnover totals.

In the money markets, repos were the busiest product with $259.13 billion of average daily turnover compared to $195.98 billion seen in 2019.

There was also a noticeable boost in the value of ETF deals transacted over Tradeweb. Average daily volume rose to $6.94 billion.

Trading in US ETFs rose by more $2.0 billion per day when compared to the figures seen in 2019, rising to $4.67 billion from $2.823 billion.

European ETFs were also busier, but only by an additional $500 million per day though that represented growth of more than 20.0% over 2019 volumes.

Another significant participant in the fixed income markets, ICE, has also reported turnover data for its fixed income portfolio trading services. The exchange racked up an average daily turnover of $1.90 billion over Q4 2020. More than doubling the volume executed in the prior quarter.

Bond portfolio trading services were reintroduced by ICE in 2020 and in wider fixed income markets they account for as much as 5.0% of turnover.

Traders using ICE can access a centralised order book or request for quotation system, to enable price discovery and the execution of orders involving baskets of bonds. Whilst a complementary portfolio auction, allows institutions to solicit all or nothing bids and offers on specific bond portfolios.

Electronic trading is taking an increasingly large share of markets which have historically been decentralised, voice-broked and traded and that trend is only likely to continue.

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