MarketAxess August Trading Volume Soars 39% as Credit and Rates Surge

Thursday, 05/09/2024 | 13:01 GMT by Jared Kirui

US high-grade credit trading led the growth, with a 33.7% rise in ADV, and municipal bonds surged by 49.5%.

Portfolio trading also set a new record, with a 125.6% year-over-year increase.

MarketAxess posted a significant increase in trading activity in August, driven by a favorable market environment that boosted both credit and rate trading volumes. The electronic trading platform recorded a 39.6% increase in total average daily volume (ADV), reaching $41.6 billion, a notable improvement compared to both the prior year and July 2024.

Credit Trading Surges

The company's portfolio trading, particularly in US high-grade and municipal bonds, contributed to this growth, setting a new record. MarketAxess' total credit ADV experienced a remarkable 27.4% increase year-over-year, with US high-grade trading leading the charge.

US high-grade ADV grew by 33.7%, while emerging markets and municipal bonds also experienced significant boosts of 25.5% and 49.5%, respectively. Despite a slight dip in market share compared to the previous year, MarketAxess regained ground from July, with high-yield bonds showing particular strength, rising 7.2%.

Portfolio trading at MarketAxess reached a record $988 million in August 2024, marking a 125.6% year-over-year increase. The company's estimated market share of US high-grade and high-yield TRACE portfolio trading hit 21.8%, up from 17.2% in July.

Despite a slight decrease in portfolio trading as a percentage of overall trading (down from 10.6% in July to 9.5% in August), the overall growth in this segment was substantial. Open Trading, MarketAxess's all-to-all trading protocol, accounted for 36% of total credit trading volume, up from 34% in the previous year. The Dealer RFQ protocol also performed well, with ADV rising 15% year over year.

Rates Trading

Rates trading also experienced substantial gains, with a total ADV of $28.4 billion in August 2024, representing a 46.1% increase compared to the prior year. This performance was boosted by a 26.9% month-over-month growth, continuing the upward trend for rates products at MarketAxess.

The preliminary variable transaction fees per million total credit were consistent with the prior year at approximately $154 but rose from $143 in July 2024. This increase was primarily attributed to the longer duration of bonds traded in the US high-grade segment. Meanwhile, the FPM for total rates was around $4, slightly down from $4.35 in the previous year.

Last month, MarketAxess reported a 24% increase in total trading volume, boosted by growth in US high-grade and Eurobonds. The electronic trading platform posted record figures in portfolio trading, attributing the performance to some of its initiatives and the potential for future market share expansion.