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MarketAxess Research

The December Effect

Bond Volumes Drop Steeply But With Shift to e-Trading

It probably comes as no surprise that bond market volumes decline steeply in the last couple of weeks of December as the holiday season kicks in. Traders are typically taking less risk and the markets are winding down towards the end of the year. In our experience, we also see a marked shift towards a greater share of electronic trading during December as investors turn to MarketAxess, for example, for transitions and end-of-year portfolio rebalancing.

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MarketAxess Research

3 Key Trends in a Changing Credit Market Structure

We are really pleased to have a series of blog posts contributed by Oliver Randall from Emory University. With access to new and much more detailed data than has been previously available, Oliver has taken a fresh look at the impact of changing credit market structure on dealer behavior and market dynamics.

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MarketAxess Research

Taking the temperature of the bond markets

Over the last two months traders have been particularly focused on a series of potentially market moving news items. In September the Fed announced that it would delay tapering its monthly asset purchase program. More recently markets have been focused on the potential breaching of the debt ceiling, a possible US default and President Barack Obama's nomination of Janet Yellen to become Federal Reserve Chairman. Looking at several indicators of the health of the market suggests that through all of the uncertainty of the past few months, the corporate bond market has been surprisingly resilient.

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MarketAxess Research

Bond turnover: the long and short of it

On our Market Insights page we have included a chart showing how annualized turnover in the U.S. high grade market has declined over time. Turnover is a useful measure of overall liquidity – the expectation would be that turnover rates in the market should stay consistent over time. Turnover is defined as the total principal amount traded, as a percentage of the amount outstanding for the bonds that traded. So, as the number of bonds issued increases there should be a comparable increase in secondary trading activity.

However turnover has declined over the past several years and is currently near the lows seen during the crisis. There are a couple of key features that characterize more liquid bonds, primarily the time that's elapsed since the bond was issued and/or the size of the issue.

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Technology Transforming a Vast Corporate Bond Market

Technology Transforming a Vast Corporate Bond Market    
"84% of Investment-Grade investors utilize electronic trading, accounting for 20% of overall volume" and MarketAxess is leading the pack in market share and penetration according to Greenwich Associates research. Download the full report

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This information is provided "AS IS." Although the data presented has been obtained or compiled from sources MarketAxess® believes to be reliable, MarketAxess® cannot and does not warrant, either expressly or impliedly, the accuracy, validity, timeliness or completeness of this information, or its suitability for any particular purpose.