Tradeweb Sees Another Record Month and Quarter to Close Out the First Half of 2018
Global trading activity has continued to remain robust in 2018, with trading volumes on Tradeweb setting a new record in June at USD590bn ADV, a 45% increase from June 2017. Average daily trading volume for Q2 was USD540bn, an increase of USD6bn per day compared to Q1’s previous record. The increase in trading activity on the platform has been driven not only by a rise in overall market activity, but by the regulatory environment, continued electrification of markets and Tradeweb’s expansion into new products and markets.
Fixed income cash and derivatives activity surged this year post-MiFID II. Rates derivatives volumes were up 144% YoY and 100% since just before the start of MiFID II (December 2017). The first 6 months of MiFID II have seen noticeable increases in European Government Bonds, Corporate Bonds, and ETF activity. EGBs are up 45%, European Corporate Bonds up 51%, and European ETFs are up 59% vs 1H17. Over EUR2tn European Government Bond traded in 1H18, the first time this milestone has been reached in a half.
Repo activity on the platform has returned to levels last seen in 2010 prior to Dodd-Frank and other banking reforms, with global repo volumes up over 30% since June 2017. Much of this growth has been driven by market participants’ adoption of electronic trading of bilateral dealer-to-client repo in USD and EUR, as well as globally.
With the anniversary of the first year of trading in Chinese bonds on Bond Connect, Tradeweb has seen over USD100bn in Chinese bonds trade on its platform since the launch, while June was the first month average daily volume exceeded USD1bn. The electronic RFQ protocol of the Tradeweb platform provides increased transparency in this growing market as index providers and investors move towards inclusion of these bonds.
Tradeweb also continues to see growth in its relatively new businesses outside of global rates. The U.S. credit platform has seen its volumes double in the first half vs. 1H17, as Tradeweb’s U.S. High-grade activity rose from 4.6% in 1H17 to 8.1% in 1H18. As mentioned previously, European credit was up 51% vs. 1H17.
In equity markets, the electronic RFQ protocol continues to see further adoption in both the U.S. and Europe. U.S. ETF volumes were up 65% in last month vs. June 2017 and Tradeweb has seen growing activity on its U.S. option platform launched in Q2. European equities (ETFs and derivatives) exceeded EUR 200bn in the first half of 2018, a milestone that took three quarters to achieve in 2017. European derivatives volumes increased 84% compared to the first half of 2017, while ETFs increased 59% – Tradeweb has also partnered with the Plato Partnership to bring electronic RFQ to European stocks.
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