Tradeweb Markets has reported total trading volume for October 2022 of USD21.3 trillion. Average daily volume (ADV) for the month was USD1.05 trillion, a decrease of 16.5 per cent year-over-year (YoY).
Tradeweb writes that its broad offering across products, geographies and client sectors resulted in a number of records for October 2022 including:
· ADV in fully electronic U.S. High Grade credit
· ADV in municipal bonds including both institutional and retail markets
· ADV in U.S. institutional ETFs
· ADV in retail money markets
· ADV in emerging markets bonds
· U.S. government bond ADV was down 14.0 per cent YoY to USD128.1 billion (bn), and European government bond ADV was up 4.2 per cent YoY (up 23.8 per cent YoY on a EUR-denominated basis) to USD37.8 billion.
o U.S. government bond activity was lower YoY, as industry volumes declined. While U.S. government bond activity in institutional markets was modestly lower, we saw a record in average daily trades, up 61.2 per cent YoY. Wholesale saw steady volume in streams that was more than offset by an industry pullback in CLOB volumes. Higher interest rates drove record volumes in the retail market. Strong European government bond trading was driven by heightened rates market volatility and record activity in UK Gilts.
Mortgage ADV was down 14.8 per cent YoY to USD170.9 billion.
Historically high mortgage rates and inflationary concerns continued to weigh on issuance and trading activity in the sector.
· Swaps/swaptions ≥ 1-year ADV was up 3.3 per cent YoY to USD209.6 billion (up 14.3 per cent on a constant currency basis), and total rates derivatives ADV was down 44.3 per cent YoY to USD273.6 bn (down 38.3 per cent on a constant currency basis)
Swaps/swaptions ≥ 1-year volumes were supported by record trading in global inflation swaps, strong activity in emerging markets swaps and robust client adoption of the request-for-market (RFM) protocol. Institutional client demand in swaps/swaptions < 1-year was substantially lower amid expectations of normalizing central bank policy.
· Fully electronic U.S. Credit ADV was up 15.2 per cent YoY to USD4.4 billion and European credit ADV was down 8.6 per cent YoY (up 8.6 per cent YoY on a EUR-denominated basis) to USD1.7bn.
U.S. and European credit volumes reflected continued client adoption across Tradeweb protocols. Global record volume in Tradeweb AllTrade’s all-to-all offering and our second-best month in portfolio trading contributed to record fully electronic U.S. High Grade activity and strong volumes across the platform. Tradeweb’s share of fully electronic U.S. High Grade and U.S. High Yield TRACE was 13.8 per cent and 6.8 per cent, respectively.
· Municipal bonds ADV was up 147.0 per cent YoY to USD463 million (mm).
Record municipal volumes reflected record activity in both institutional and retail client sectors. Market volatility and sharply rising interest rates continued to boost volumes overall.
· Credit derivatives ADV was up 39.3 per cent YoY to USD15.9bn.
o Market-wide volatility continued to boost volumes overall.
· U.S. ETF ADV was up 55.4 per cent YoY to USD7.7bn and European ETF ADV was down 6.8 per cent YoY (up 10.7 per cent YoY on a EUR-denominated basis) to USD2.1bn.
An increase of 43.2 per cent YoY in global institutional client activity was driven by record U.S. trading activity and reflects further adoption of Tradeweb’s request-for-quote (RFQ) protocol.
· Repurchase Agreement ADV was up 13.6 per cent YoY to USD373.3bn.
Continued client adoption of Tradeweb’s electronic trading solutions drove Global Repo activity, despite significant volatility in money markets and sustained elevated usage of the Federal Reserve’s reverse repo facility. Retail money markets activity reached a record high as rates continued to rise.