Tradeweb Markets Inc, global operator of electronic marketplaces for rates, credit, equities and money markets, has reported total trading volume for November 2023 of USD38.2 trillion. Average daily volume (ADV) for the month was a record USD1.80 trillion, an increase of 59.2 per cent year-over-year (YoY).
In November 2023, Tradeweb records included:
ADV in U.S. government bonds
ADV in European government bonds
ADV in swaps/swaptions ≥ 1-year
ADV in fully electronic U.S. High Grade credit
ADV European credit
ADV in equity convertibles/swaps/options
ADV global repurchase agreements
November 2023 Highlights
US government bond ADV was up 19.5 per cent YoY to USD163.7 billion. European government bond ADV was up 30.5 per cent YoY to USD44.8bn.
Record US government bond volumes were supported by growth across all client sectors, increased adoption across a diverse set of trading protocols on the institutional platform and sustained rates market volatility. Higher interest rates continued to drive trading in the retail market. Record European government bond volumes were supported by sustained rates market volatility and strong volumes by hedge fund accounts.
Mortgage ADV was up 16.7 per cent YoY to USD188.3 billion.
Strong To-Be-Announced (TBA) volumes were driven by increased participation from hedge fund accounts as well as elevated roll activity. Specified pool activity increased >200 per cent YoY with an uptick in origination trading on the platform.
Swaps/swaptions ≥ 1-year ADV was up 178.4 per cent YoY to USD580.8 billion and total rates derivatives ADV was up 132.6 per cent YoY to USD795.1 billion.
Record volume in swaps/swaptions ≥ 1-year was driven in part by increased client activity and a 242 per cent YoY increase in compression activity, which carries a lower fee per million.
Quarter-to-date compression activity is running higher than 3Q23. Robust volumes were also driven by strong activity in global inflation swaps, the request-for-market (RFM) protocol and emerging market swaps.
Fully electronic U.S. credit ADV was up 32.0 per cent YoY to USD6.1 bilion and European credit ADV was up 29.7 per cent YoY to USD2.3 billion.
Strong US credit volumes, most notably record ADV in fully electronic US High Grade activity, reflected continued client adoption in Tradeweb protocols, including request-for-quote (RFQ), as well as record adoption in Tradeweb AllTrade and portfolio trading. Tradeweb’s share of fully electronic U.S. High Grade and U.S. High Yield TRACE was 16.7 per cent, and 7.0 per cent, respectively. Record European credit volumes were supported by strong activity in portfolio trading and Tradeweb Automated Intelligent Execution (AiEX).
· Municipal bonds ADV was down 0.2 per cent YoY to USD475 million (mm).
While retail municipal bond activity remained somewhat muted against a broader backdrop of lower yields, a robust tax lost harvesting month by institutional asset managers kept flows in this part of the market significantly more positive.
Credit derivatives ADV was down 7.8 per cent YoY to USD9.8 billion.
Tighter credit spreads led to lower overall swap execution facility (SEF) market activity.
US ETF ADV was up 4.5 per cent YoY to USD7.0 billion and European ETF ADV was up 10.0 per cent YoY to USD2.6 billion.
Institutional client engagement in US ETFs remained robust, with a 4.5 per cent increase in platform volumes YoY. European ETFs were up as broader market volumes remained relatively flat.
· Repurchase agreement ADV was up 35.2 per cent YoY to USD534.7 billion.
Increased client adoption of Tradeweb’s electronic trading solutions drove record global repo activity, the firm writes. Current US market conditions shifted demand from the Federal Reserve’s reverse repo facility to money markets. Retail money markets activity continued to be strong as interest rates remained elevated.