The global fixed income market totals about $130 trillion in outstanding debt. By comparison, global equities markets total about $42 trillion. Given the scale of the fixed income market, it is critical for traders to keep up with the latest global electronic trading trends driving execution in the market.
Electronic trading in the world’s fixed income market continues to evolve with expanded platforms and protocols, yet despite growing availability and ongoing innovations, demand for transactions involving requests for quotes (RFQ) isn’t going away.
“RFQ is the way the majority of trades are being placed,” said Matthew Coupe, Head of Cross Asset Market Structure for the Global Markets business at Barclays. “It’s starting to evolve, but RFQ is not dead. It’s still the answer to ensure you can access material liquidity.”
To betted understand the latest trends, Coupe and the Market Structure team conducted a Global Client Fixed Income Markets Structure Survey, drawing over 260 responses from asset managers, central banks, banks, corporations, hedge funds, insurance companies and other institutions. This wide range of respondents represented institutions with fixed-income assets under management ranging from $10 billion to $200 billion.
Respondents came from three global regions: the Americas with nearly half of the activity; Europe, the Middle East and Africa, also with close to half; and the Asia and Pacific region with the balance of the activity. They also represented rates & credit, for both cash & derivatives.
The survey posed nearly 50 questions regarding trading tools and protocols; execution solutions and strategy; best execution and trader performance analysis; dealer selection; and regulatory change.
Here are three of the survey’s key findings.