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Tradeweb reports March 2023 total trading volume of USD34.7 trn and record ADV of USD1.51 trn

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Electronic marketplace operator Tradeweb has reported total trading volume for March 2023 of USD34.7 trillion. Average daily volume (ADV) for the month was a record USD1.51 trillion, an increase of 23.0 per cent year-over-year (YoY), despite continued foreign exchange headwinds. 

The firm writes that for the first quarter of 2023, total trading volume was USD85.3 trillion and ADV was a record USD1.36 trillion, an increase of 16.2 per cent YoY, with preliminary average variable fees per million dollars of volume traded of USD2.71.

In March 2023, Tradeweb records included:

ADV in total rates derivatives

ADV in swaps/swaptions ≥ 1-year

ADV in emerging markets interest rate swaps and global inflation swaps

ADV in global repurchase agreements

ADV in retail U.S. government bonds

ADV in retail money markets

For the first quarter of 2023, Tradeweb records included:

ADV in European government bonds

ADV in swaps/swaptions ≥ and < 1-year

ADV in fully electronic U.S. High Grade credit

ADV in U.S. credit Tradeweb AllTrade, including all-to-all request-for-quote (RFQ)

ADV in global portfolio trading

ADV in equity convertibles/swaps/options

ADV in repurchase agreements

ADV in retail U.S. government bonds

ADV in retail money markets

U.S. government bond ADV was up 1.5 per cent YoY to USD150.9 billion. European government bond ADV was up 11.8 per cent to USD42.4 billion.

Record retail U.S. government bond activity and strong institutional volumes were offset by declines in wholesale trading, the firm writes. Higher interest rates continued to drive trading in the retail market. U.S. and European government bond volumes were supported by a significant rise in rates market volatility.

Mortgage ADV was down 10.6 per cent YoY to USD166.2 billion.

While market uncertainty and volatility weighed on overall activity, institutional specified pool trading set a new record due to growing client engagement.

Swaps/swaptions ≥ 1-year ADV was up 42.2 per cent YoY to USD355.0 billion and total rates derivatives ADV was up 51.7 per cent to USD609.1 billion.

Record volume in swaps/swaptions ≥ 1-year was driven in part by a surge in interest rate volatility, particularly in shorter dated instruments and higher compression activity. Strong volumes continued to be supported by record activity in both global inflation and emerging markets swaps, as well as robust client adoption of the request-for-market (RFM) protocol.  

Credit   

Fully electronic U.S. credit ADV was up 18.2 per cent YoY to USD4.4 billion and European credit ADV was down 14.9 per cent to USD1.8 billion.

Strong U.S. credit volumes reflected continued client adoption across Tradeweb protocols, including RFQ, Tradeweb AllTrade and portfolio trading. Tradeweb’s share of fully electronic U.S. High Grade and U.S. High Yield TRACE was 12.9 per cent and 6.0 per cent, respectively. Heightened market volatility weighed on European credit volumes.

Municipal bonds ADV was up 6.3 per cent YoY to USD285 million.

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

Credit derivatives ADV was up 11.9 per cent YoY to USD39.4 billion. 

Semi-annual rolling activity as well as market-wide volatility continued to boost volumes overall.

Equities   

US ETF ADV was up 2.6 per cent YoY to USD8.5 billion and European ETF ADV was down 25.8 per cent to USD2.8 billion.

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

Money Markets

Repurchase agreement ADV was up 23.0 per cent YoY to USD444.5 billion.

Continued client adoption of Tradeweb’s electronic trading solutions drove record global repo activity, the firm says, 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 interest rates remained elevated.

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