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Tradeweb reports August 2023 total trading volume of USD33.0 trn and average daily volume of USD1.44 trn

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Electronic marketplace operator, Tradeweb Markets Inc has reported total trading volume for August 2023 of USD33.0 trillion. Average daily volume (ADV) for the month was USD1.44 trillion, an increase of 41.2 per cent year-over-year (YoY), including foreign exchange tailwinds.

In August 2023, Tradeweb records included:

Share of TRACE in fully electronic U.S. High Grade credit

Share of TRACE in fully electronic U.S. High Yield credit

ADV in swaps/swaptions ≥ 1-year

ADV in Chinese bonds

The firm writes that next month it will release its 3Q23 fee per million calculation in conjunction with the September Monthly Activity Report. “We will be moving China Bonds fee per million from Cash Credit to Credit Derivatives, China Bonds and U.S. Cash “EP” given that our China Bonds product has a fee per million that is more in-line with the Credit Derivatives and U.S. Cash “EP”. 

   

U.S. government bond ADV was up 14.9 per cent YoY to USD142.7 billion. European government bond ADV was up 19.6 per cent YoY to USD32.9 billion.

Growth was driven by strong activity across all client sectors. Higher interest rates continued to drive trading in the retail market. U.S. and European government bond volumes were supported by sustained rates market volatility.

Mortgage ADV was up 11.0 per cent YoY to USD174.4 billion.

Overall trading activity was supported by relative value trading, despite continued sluggish origination. Client engagement in specified pool trading remained strong.

Swaps/swaptions ≥ 1-year ADV was up 125.4 per cent YoY to USD381.8 billion and total rates derivatives ADV was up 89.0 per cent YoY to USD535.9 billion.

Record volume in swaps/swaptions ≥ 1-year was driven in part by heightened interest rate volatility, particularly in shorter dated instruments, and a 195 per cent YoY increase in compression activity. Quarter-to-date compression percentage is running higher than 2Q23. 

Shorter dated, lower duration instruments in swaps/swaptions ≥ 1-year have a lower fee per million. Strong volumes continued to be buoyed by activity in emerging markets swaps, global inflation swaps and the request-for-market (RFM) protocol.

CREDIT   

   

Fully electronic U.S. credit ADV was up 38.9 per cent YoY to USD4.8 billion and European credit ADV was up 48.5 per cent YoY to USD1.6 billion.

Strong U.S. credit volumes reflected continued client adoption across Tradeweb protocols, including request-for-quote (RFQ), Tradeweb AllTrade and portfolio trading. Tradeweb captured a record 17.3 per cent share of fully electronic U.S. High Grade TRACE, and a record 8.5 per cent share of fully electronic U.S. High Yield TRACE. Higher European credit volumes were supported by strong activity in sessions-based trading and RFQ.

·         Municipal bonds ADV remained relatively flat YoY to USD345 million (mm).

Municipal volumes reflected healthy institutional and retail client activity.

Credit derivatives ADV was down 30.5 per cent YoY to USD7.9 billion. 

Continued tightening of credit spreads led to a decline in overall broader swap execution facility (SEF) market activity.

EQUITIES   

   

U.S. ETF ADV was up 28.0 per cent YoY to USD6.8bn and European ETF ADV was down 11.9 per cent YoY to USD1.9 billion.

Elevated volatility earlier in the month supported strong U.S. ETF wholesale activity, while institutional activity was down. European ETF volumes reflected declining overall market volumes.

  

   MONEY MARKETS   

   

·         Repurchase agreement ADV was up 33.1 per cent YoY to USD491.9 billion.

Further client adoption of Tradeweb’s electronic trading solutions drove global repo activity. Current U.S. 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.

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