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Efficiency: The Buy-Side Wildcard in a Tough Treasury Market Environment

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headshot of Casey Costanza
Casey Costanza
Director, U.S. Treasuries, Tradeweb

2021 was a milestone year for U.S. Treasuries. First, there was a surge in supply, when gross issuance of nominal Treasury bonds and notes hit an all-time high of $336 billion in February1. Then, there was the seemingly limitless appetite. Through December, average daily trading volume in U.S. Treasuries was $624.1 billion, which is up 3.5% year-to-date. And, of course, there was the continued electronification of the market, where at Tradeweb, we saw average daily volume top $120 billion in U.S. Treasuries across client sectors through 2021, an increase of 32.2% over 2020.

Not bad for an asset with a benchmark 10Y yield that hovered between 1% and 1.5% for most of the year.

And that’s exactly what made it such a fascinating year in fixed income. Challenged by persistently low yields, a glut of supply and the constant uncertainty of the pandemic, market participants have had to find ways to maximize their efficiency, minimize trading costs and create liquidity in a seemingly impossible set of circumstances. To shed some light on how they managed to do it, we recently spoke to some of our institutional buy-side Treasury trading clients to share their best tips, tools and solutions.

Trade at Close

One workflow tool that has helped enormously over the past year came in the form of Trade at Close functionality for Treasury list trading.

Maile Robichaud, Head of Fixed Income Trading Americas at State Street Global Advisors, explained that the protocol has given her a big efficiency boost, “I can set the trades and forget about them, move on to work on other trades that need attention, and I don’t need to think about those again until later in the day when it when it's time to price them.

“The efficiency of not having to upload spreadsheets at the end of the day is a big source of time-savings. Once the pricing is available on the counterparty side, it'll flow back into the order management system for review, and I can send it downstream for back-office processing. It’s just a much more concise workflow which allows the downstream process to begin sooner.”

On Tradeweb, there are a number of solutions to accommodate trading at the close, and we’re continuing to enhance these protocols in 2022. In Q1, we will be enhancing our Trade at Close list functionality with the ability to trade on spread, which will later get spotted at the closing price.

Voice Processing

Our voice processing capability also emerged as a valuable trading tool that has really earned its stripes in the pandemic-driven remote work environment. The technology allows a buy-side trader to electronically send an order from their Order Management System (OMS) directly to Tradeweb, which then gets sent directly to the dealer as soon as the trade is bilaterally agreed upon. The voice trade is ultimately initiated by the buy-side client, rather than waiting for the dealer to submit the trade confirmation details to them. All trade details are electronically returned to the OMS and the trade is booked.

According to Mike McClinchie, Head of U.S. Fixed Income Trading at JPMorgan Asset Management, this has been a game changer. “What I started to do during the pandemic was, regardless of whether I was dealing with a bilateral trade or an RFQ, to keep things simple I just started releasing all of my orders from my OMS to Tradeweb,” he explained.

“I kept tracking information on where I thought dealers were, and then I would figure out what I wanted to do, pull it up in the VP ticket, get on the phone, do the trade and, within a second, I had the dealer. Everyone on the other side knew that it was coming over voice process, which kept things fast and simple. I was also able to reduce risk and I’m still using the process today.”

With this tool, we allow clients to enter their competing quotes for these voice process trades, which is then recorded on Tradeweb blotters, and sent down post trade to buy-side order management systems for record keeping and best execution requirements.

Electronification of Complex Trades

It’s not just plain vanilla trades that are benefitting from these continual tweaks and improvements to electronic Treasury trading workflows. Executing multi-leg trades, like rolls, curves, butterflies and basis have traditionally been done over the phone due to their complexities, but we’ve been continuing to work closely with clients to develop mechanisms for executing more complex trades.

Tracy Rucker-Wilson, Head of Global Portfolio Risk Management at Vanguard shared her experience with basis trading, explaining: “When you think about the various types of trades we do where orders may be time-sensitive or market benchmark-sensitive or curve-sensitive, the process can get very complex. In the case of basis trading, where our orders are really spread-sensitive, we really want to minimize slippage between cash and futures on the execution.

“By using an execution management solution that offers basis trading – where we can price the offsetting legs of the trade simultaneously to allow for a very low risk transfer – we’re able to minimize market exposure. The electronification of basis trading has really removed a lot of the latency from that process to ultimately reduce exposure.”

More Data in One Place with RFQ+

The common bond in all of these enhancements is consistently finding ways to keep traditional trading workflows pretty much the same as they’ve always been, but add more information to the mix to make it easier to stay in that workflow without having to break stride.

Our functionality, RFQ+, does just that. The RFQ+ protocol allows the buy-side to set up an RFQ trade as they normally would, select up to five dealers and then click the Trade Best button to assess the best price across the RFQ responses and executable streams available on both Tradeweb Plus (click-to-trade) and STAQ (Streaming Actionable Quotes). Then, the system not only looks at the RFQ responses, but all of the executable streams that are coming into you on the Tradeweb Treasury platform, and if there is a better stream price, it will get done at that level. This is another example of a performance tweak born out of client requests during the pandemic and helps clients to achieve best execution.  

Continued Evolution of Electronic Markets

As the traders continued to share their experiences on the frontlines of the Treasury market over the course of the last two years, it became clear that the steady march of innovation in electronic trading workflows is serving as a counterbalance to the tough market environment by squeezing greater levels of efficiency out of the workflow.

For more buy-side tips, tools, techniques and insights on how Tradeweb can help maximize your Treasury trading efficiency, reach out to us at


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1 Source: U.S. TreasuryDirect, Tradeweb

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