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Tradeweb reports May 2023 total trading volume of USD29.4 trillion and ADV of USD1.35 trillion

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Electronic marketplace Tradeweb Markets Inc has reported total trading volume for May 2023 of USD29.4 trillion. Average daily volume (ADV) for the month was USD1.35 trillion, an increase of 14.1 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 May 2023 including:

ADV in specified pools

ADV in fully electronic US High Grade credit all-to-all trading

ADV in global repurchase agreements

U.S. government bond ADV was up 6.1 per cent YoY to USD144.3 billion. European government bond ADV was up 16.5 per cent to USD41.6 billion.

Trading in U.S. government bonds was supported by strong client activity in institutional and retail markets. Wholesale volumes reflected continued client adoption of Tradeweb protocols, as overall industry volumes declined. European government bond volumes were supported by ongoing hedge fund activity amid volatile markets as well as ongoing strong interest in UK Gilts.

Mortgage ADV was up 10.8 per cent YoY to USD166.6 billion.

Declining volatility and favourable valuations broadly supported to-be-announced (TBA) trading activity. Tradeweb reported record ADV in specified pool trading spurred by FDIC portfolio liquidations.

Swaps/swaptions ≥ 1-year ADV was up 47.0 per cent YoY to USD315.8 billion and total rates derivatives ADV was up 23.9 per cent to USD467.3 billion.

Higher volume in swaps/swaptions ≥ 1-year was driven in part by continued focus on global central bank policy and inflation expectations. Strong volumes reflected higher compression activity.

CREDIT

Fully electronic U.S. credit ADV was up 9.5 per cent YoY to USD4.5bn and European credit ADV was up 10.5 per cent to USD1.9 billion.

U.S. credit volumes reflected continued client adoption across Tradeweb protocols, including sessions-based trading and Tradeweb AllTrade, including record ADV in fully electronic U.S. High Grade credit all-to-all trading, as broader TRACE credit ADVs increased 3.3 per cent YoY. Tradeweb’s share of fully electronic U.S. High Grade and U.S. High Yield TRACE was 14.1 per cent and 5.8 per cent, respectively. European credit volumes were strong, despite the additional UK bank holiday at the beginning of the month.

Municipal bonds ADV was down 22.5 per cent YoY to USD321 million (mm).

Tradeweb volumes were down 22.5 per cent versus the broader municipal bond market decline of 26.7 per cent2 YoY. Tradeweb volumes continued to be supported by increased client adoption of electronic protocols, the firm says.

Credit derivatives ADV was down 51.1 per cent YoY to USD8.3bn.

Subdued volumes reflected broader market declines, as broader industry SEF volumes declined 43.4 per cent3 YoY.

EQUITIES

U.S. ETF ADV was down 5.8 per cent YoY to USD7.2bn and European ETF ADV was down 14.2 per cent to USD2.4bn.

U.S. institutional and wholesale ETF volumes were down, as overall U.S. ETF market volumes declined 21.6 per cent4 YoY. European ETF trading activity reflected overall declining market volumes.

MONEY MARKETS

Repurchase agreement ADV was up 11.9 per cent YoY to USD470.2bn.

Continued client adoption of Tradeweb’s electronic trading solutions drove record 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 remained strong as interest rates remained elevated.

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