Tradeweb's September Average Daily Volume Surges 68%, Rates and Credit Drive Growth

Friday, 04/10/2024 | 13:41 GMT by Jared Kirui

The rates segment saw substantial increases, particularly in US government bonds, up 59% YoY.

Credit trading also performed strongly, with US credit ADV growing by 77% YoY.

Tradeweb Markets posted a strong performance in September, reaching record total trading volumes of $56.1 trillion and an average daily volume (ADV) of $2.63 trillion. Throughout the third quarter, the electronic marketplace operator has posted impressive numbers due to a surge in trading activity across multiple asset classes.

Strong ADV Performance

The average daily volume was $2.63 trillion in September, representing a 68.3% year-over-year (YoY) growth. This was part of an overall Q3 performance in which the ADV reached $2.21 trillion, up 55.3% YoY.

The rates segment, a significant part of Tradeweb's portfolio, experienced substantial growth. ADV in US government bonds rose by 59.8% YoY to $232.2 billion, driven by strong institutional and retail activity.

Similarly, European government bonds showed healthy growth, with ADV increasing by 16.7% YoY, fueled by heightened UK Gilt activity. Mortgage trading volumes also reached new highs, with ADV rising 32.3% YoY to $240.2 billion. This was boosted by the volatility around the Federal Reserve's September meeting.

The swaps and swaptions segment demonstrated the highest growth in the rates category. The ADV for swaps/swaptions with durations of at least one year surged by 73.1% YoY to $576.3 billion. The overall rate derivatives ADV reached $1.02 trillion, a 79.1% increase. Market volatility, particularly surrounding central bank moves, contributed to these numbers as traders sought to hedge risks.

Tradeweb's credit trading volumes showed remarkable performance as well. Fully electronic US credit ADV grew by 77% YoY to $8.6 billion, while European credit ADV was up 27.9% YoY to $2.7 billion. Record trading activity in European portfolio trading and wider adoption of the request-for-quote model drove this growth. Municipal bonds also saw growth, with ADV increasing by 7.7% YoY to $385 million, outpacing the broader market trends.

Credit Derivatives Volumes

Credit derivatives volumes gained traction, with a 49.9% YoY increase to $54.9 billion in September. The rise in hedge fund activity and credit volatility helped boost volumes in swap execution facilities and multilateral trading facilities.

The equities segment also experienced a growth boost. US ETF ADV rose by 2.7% YoY to $7.6 billion, while European ETF ADV increased by 39.8% YoY to $3.1 billion. A diversified range of clients used an expanded set of trading functionalities, supporting this growth.

Repo volumes saw a marked increase due to a combination of quantitative tightening, increased collateral supply, and current market conditions, which led participants to shift from the Fed's reverse repo facility to money markets.