‘Peripheral’ Nations Gaining in European Govies

Terry Flanagan

Trading in the European fixed income rates market is expanding beyond traditional government bonds to include peripheral countries, triggered by volatility and quantitative easing by the European Central Bank,

“There’s been a lot of volume in general in European government bond trading, and particularly in the peripherals,” Mark Monahan, CEO of MTS Markets International, told Markets Media. “In many of these markets, we are the main player in the interdealer market, as well as one of the best alternatives in the dealer-to-client market. In that area in general, volumes have been booming in the European government bonds.”

Monahan will speak about liquidity and market structure at Markets Media’s Fixed Income Trading & Investing Summit on May 5.

Earlier this year, MTS Markets International, a subsidiary of London Stock Exchange Group, has launched trading in a U.S. ATS for its BondVision trading platform, providing buy-side institutions with a view of inter-dealer prices, streamed from 25 market-making banks on government bonds from 30 different European countries, with a particular focus on peripheral markets including Spain, Italy and France.

MTS provides a trading environment for the inter-dealer marketplace, enabling primary dealers to access liquidity, and facilitates the dealer-to-client bond market through BondVision.

“With our rates platform you actually see the interdealer market,” Monahan said. “You can’t trade on it, because you’re not part of the market-making interdealer community, but when you want to trade a bond, you click on that country, and the first thing you see is the interdealer market before you set up your request for quote.”

He added, “There are a lot of people that probably haven’t traded electronically that would like to. We’re agnostic, and however people want to trade is fine with us. I think that there is a community of people that want to trade electronically in European rates, but haven’t before, and that’s some of the people that we’re reaching out to, as well as the ones that are trading now, but want an alternative.”

Last year, MTS acquired Bonds.com, a corporate bond trading platform, and is rebranding it MTS BondsPro, and plans to cross-sell across both platforms to be active providers of rates and credit to U.S. market participants.

“The acquisition was done last May,” said Monahan. “We’ve privatized the firm and put it underneath the MTS umbrella. We are coming out with a new front-end GUI, which is in HTML5, which has gotten great reviews. We’re very proud of our new front end; however, we’re agnostic. However the client wants to trade, we want to trade with them.”

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