After several quarters of growth in fixed-income revenues, damped by a lull during the second quarter of 2017, market participants eagerly anticipate the impact that rate rises and tapering will have on volatility.

As a result, there has been a significant pickup in hiring activity for fixed-income professionals, as banks look to add to their sales and trading desks to better service clients. In addition, a number of banks impacted by previous balance sheet constraints and changes in strategy are starting to turn the corner and return to a more stable footing.

“The end result of all this activity will be a much more competitive market environment—especially for the business of the largest buy-side firms that are accounting for an ever-growing share of fixed-income trading volume and dealer trading revenues,” says Greenwich Associates Managing Director Frank Feenstra.

2017 Greenwich Share Leaders in U.S. Fixed-Income

The vast majority of fixed-income trading volume and revenue is still captured by the six dealers that make up the list of the 2017 Greenwich Share Leaders in Overall U.S. Fixed Income: leaders Citi and Goldman Sachs, followed by J.P. Morgan, Bank of America Merrill Lynch, Morgan Stanley, and Barclays.

Dealers from this group also dominate the underlying product markets in U.S. fixed income. In both Rates and Credit Products, the 2017 Greenwich Share Leaders are Citi, Goldman Sachs and J.P. Morgan. In Emerging Markets, the 2017 Share Leaders are Citi, Barclays and Bank of America Merrill Lynch, and in Municipals, the Share Leaders are Citi, Morgan Stanley and Bank of America Merrill Lynch. Only in Securitized Products does a seventh dealer claim a spot on the list, with Credit Suisse joining Bank of America Merrill Lynch and J.P. Morgan as the 2017 Share Leaders.

(In Overall Fixed Income, Greenwich Associates names the top five firms by market share as Share Leaders (including ties). In individual product categories, Greenwich Associates names three Share Leaders.)

2017 Greenwich Quality Leaders in U.S. Fixed-Income

The same dealers claim most spots on the list of the 2017 Greenwich Quality Leaders.  Citi wins the designation as the 2017 Greenwich Quality Leader in Overall U.S. Fixed-Income Service, Overall Sales, Overall Trading, and in Rates and Municipals. Citi is joint Quality Leader with Bank of America Merrill Lynch in Credit, and with Barclays and Jefferies in Emerging Markets. J.P. Morgan is the 2017 Greenwich Quality Leader in Overall U.S. Fixed-Income Research and is joint Quality Leader with Bank of America Merrill Lynch in Securitized Products.

2017 Greenwich Leaders in U.S. Fixed Income E-Trading

Citi also leads in electronic trading, which accounts for almost 45% of the fixed-income volume traded by U.S. investors.  Citi and second-ranked Goldman Sachs make it into the top three for online trading in rates, credit and pass-throughs.