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Tradeweb reports ETF average daily volume down in January 2023 

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Tradeweb Markets Inc. has reported total trading volume for January 2023 of USD23.2 trillion (tn). Average daily volume (ADV) for the month was USD1.15tn, an increase of 2.8 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 January 2023 including:

ADV in European government bonds

ADV in fully electronic US High Grade credit

ADV in European credit

ADV in global portfolio trading

ADV in US credit Tradeweb AllTrade, including sessions-based trading and all-to-all trading

ADV in US institutional ETFs

Tradeweb writes that it continued to help its clients navigate a complex macroeconomic backdrop, including evolving central bank policy, sustained elevated volatility, economic concerns and a strong US dollar (USD).

January 2023 highlights

Rates

US government bond ADV was down 7.2 per cent YoY to USD136.1 billion (bn). European government bond ADV was up 14.3 per cent to USD42.3bn.

Higher US retail government bond activity was offset by declines in wholesale trading. Higher interest rates continued to drive trading in the retail market. Record European government bond volume was driven by issuance and heightened rates market volatility, the firm says.

Mortgage ADV was down 16.4 per cent YoY to USD177.1bn. Historically high mortgage rates continued to weigh on overall market activity and issuance, while the recent decline in market volatility provided some support.

Swaps/swaptions ≥ 1-year ADV was up 17.3 per cent YoY to USD192.4bn and total rates derivatives ADV was up 2.2 per cent to USD313.9bn.

Swaps/swaptions ≥ 1-year volumes were supported by strong activity in global inflation and emerging markets swaps, with robust client adoption of the request-for-market (RFM) protocol.

Credit

Fully electronic US Credit ADV was up 27.0 per cent YoY to USD4.9bn and European credit ADV was up 3.1 per cent to USD2.2bn.

Record European credit and strong US credit volumes reflected continued client adoption across Tradeweb protocols, including request-for-quote (RFQ), Tradeweb AllTrade and portfolio trading. Record volume in global portfolio trading and Tradeweb AllTrade, including sessions-based trading and all-to-all trading, drove record ADV in fully electronic US High Grade activity, the firm says. Tradeweb’s share of fully electronic US High Grade and US High Yield TRACE was 13.7 per cent and 5.6 per cent, respectively.

Municipal bonds ADV was up 40.8 per cent YoY to USD318 million (mm).

Strong municipal volumes reflected robust institutional and retail client activity, the firm writes. Market volatility and elevated interest rates continued to boost volumes overall.

Credit derivatives ADV was down 26.6 per cent YoY to USD9.6bn.

Overall market volumes were lower due to subdued credit market volatility.

Equities

US ETF ADV was down 26.0 per cent YoY to USD7.1bn and European ETF ADV was down 22.7 per cent to USD2.9bn.

Record US institutional ETF activity, driven by further adoption of Tradeweb’s RFQ protocol, was more than offset by declining wholesale volumes, the firm says. European ETF volumes reflected declining overall market volumes.

Money markets

Repurchase Agreement ADV was up 20.4 per cent YoY to USD416.9bn.

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, the firm writes, adding: “Retail money markets activity reflected our second-best month (record was November 2022) as interest rates remained elevated.”

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