Tradeweb Reports Monthly Activity
Tradeweb has published its May 2019 Monthly Activity Report, which captures trading activity in fixed income, derivatives, and ETF markets.
Across all asset classes, May 2019 set a new record in total trading volume, with average daily trading volume (ADV) of 741.8 billion, up 38.7% year over year. The strong volumes were driven by a rise in trading of short-term tenors as well as continued growth in overall trading volumes
Key trends for the month include:
- Short-Term Rates Trading Surges: Activity in rates derivatives increased 94.0% year-over-year in May, reaching a total ADV of $228.1 billion, predominately driven by an increase in trading of swaps and swaptions under 1 year in duration.
- Repo Volumes Crest $200 Billion for First Time in Decade: Total ADV of $211.5 billion in repurchase agreements were traded during the month of May, an increase of 43.7% year-over-year, and the first time repo market volumes exceeded the $200 billion threshold since March 2009.
- Increase in Mortgage-Backed Security Volume: Total ADV of $157.7 billion in mortgage-backed securities was up 14.6% year-over-year, driven in part by the inception of trading of Uniform Mortgage-Backed Securities, the new common mortgage-backed security issued by both Fannie Mae and Freddie Mac.
- U.S. Government Bond Volumes Rise Amid Volatility: U.S. government bond trading volume was up 23.6% in May, bringing total ADV for the month to $83.6 billion, reflecting the repricing of market expectations as yields continued to decline throughout the month.
- Chinese Bond Market Activity Continues to Grow: ADV of $859 million in Chinese bonds were traded on the Tradeweb platform in May, an 85.7% year-over-year increase.
The full Tradeweb Monthly Activity Report for May 2019 is available here: https://www.tradeweb.com/market_activity_reports/
The platform provides a central limit order book for standardised interest rate derivatives.
CEO Lee Olesky says "our clients want to do more electronically."
This will aid the transition from LIBOR by providing a rate based on overnight indexed swaps.
Third-country benchmarks that are widely used in the EU could become unavailable.
The market should still transition to Libor alternatives before the end of 2021.