In a month marked by significant activity in fixed-income markets, MarketAxess delivered an impressive performance with a 56% increase in average daily trading volume (ADV) year-over-year. Other segments like emerging markets and municipal bonds hit record highs, as the US Treasury trading volumes rebounded sharply.
However, the company faced challenges in US high-yield activity, highlighting a dynamic and shifting landscape. The company attributed this rebound to a robust market environment and an ongoing focus on enhancing platform capabilities.
US Treasuries
US Treasury ADV soared to $30.7 billion in November, more than doubling compared to the previous year. According to the company, this remarkable growth highlighted a recovery in rates trading despite slight declines from October’s record numbers.
Credit trading registered a mixed performance in November. While US high-grade trading remained stable compared to the prior year, high-yield activity dropped 31%. The decrease was attributed to lower credit spread volatility , affecting trading momentum in that segment.
Commenting about the performance, Chris Concannon, the CEO of MarketAxess, said: “We recently launched our block trading solution, and we are experiencing positive client engagement in the emerging markets hard currency market.”
He added that “21 dealers and 26 long-only clients were active with the average trade size executed over $4 million notional. We have also enhanced our portfolio trading functionality to include benchmark trading and a record 76% of portfolio trading volume was executed on X-Pro.”
On the other hand, emerging markets demonstrated resilience, with ADV reaching a record $3.8 billion, reflecting a 15% year-over-year increase. Municipal bonds also posted gains, with ADV climbing 5% to $631 million.
US Credit Markets
MarketAxess’s investment in advanced trading protocols and tools also performed well in November. Its portfolio trading functionality, enhanced with benchmark trading, saw 76% of its trading volume executed on the X-Pro platform, a new record.
These initiatives aim to boost the company’s market share in US credit markets. Despite the strong trading volumes, preliminary variable transaction fees per million dropped year-over-year due to product mix changes, particularly in US high-yield activity.
Total credit FPM declined to $146 in November, down from $157 a year earlier. Rates FPM also dipped to $4.07, reflecting broader shifts in trading behavior.
