“In today’s dynamic and complex financial landscape, navigating the fixed income markets for mortgages and credit presents unique challenges for clients who need sophisticated tools to manage their exposure and achieve their financing needs.”
CME Group is further expanding into fixed-income markets by launching repo on corporate bonds and mortgage-backed securities (MBS) on BrokerTec Quote.
BrokerTec Quote, CME Group’s dealer-to-client (D2C) request-for-quote (RFQ) trading platform, went live with U.S. corporate bonds on May 20, 2024. The remaining products will go live by the end of June. Additionally, CME Group’s U.S. credit futures will begin trading on June 17, 2024.
U.S. corporate bonds already live
Following the launch, clients will be able to conduct their risk management and fixed-income financing needs from one platform. This is in addition to BrokerTec’s established dealer-to-dealer (D2D) central limit order book (CLOB) repo platform where almost $600B average daily notional volume (ADNV) of repo was transacted in 2023.
BrokerTec is a leading marketplace for benchmark cash U.S. Treasuries and U.S. and EU repo with $750B ADNV traded daily across its D2D CLOB, D2C RFQ, and streaming platforms. The addition of U.S., euro, and sterling corporate bonds and MBS on BrokerTec Quote creates a holistic product suite with U.S. and euro repo on all major government bonds already available to trade on the platform.
John Edwards, Global Head of BrokerTec, said: “In today’s dynamic and complex financial landscape, navigating the fixed income markets for mortgages and credit presents unique challenges for clients who need sophisticated tools to manage their exposure and achieve their financing needs. We have been actively expanding BrokerTec Quote to cover repo on all major government bond markets in recent years. The addition of corporate bonds and MBS is a natural complement to our core offering and follows significant demand from clients.”
BrokerTec transacted $775B in ADNV in April
BrokerTec transacted $775B in average daily notional value (ADNV) in April across benchmark cash U.S. Treasuries and U.S. and EU Repo on its dealer-to-dealer CLOB and D2C RFQ and streaming platforms, up 3.5% compared to March 2024.
In EU Repo, liquidity remained robust and volumes on EU Repo were steady during April, with €296B in notional value trading each day. On April 26, the highest notional volume in a single day in 2024 so far was traded, with a value of €329B.
In April, U.S. Repo ADNV was up 3% from March and up 5% YoY, with transactions worth $294B trading hands each day. Quantitative easing continued to be a driver for strong repo activity.
BrokerTec U.S. Treasury April ADNV was $108.2bn, up 18% versus March 2024 and up 18% YoY. Market participants continue to monitor the risk associated with the change in economic conditions, inflation expectations and U.S. Treasury issuance in anticipation of FOMC actions for the rest of the year.
BrokerTec’s overall Treasury RV product produced a $1.9 bn ADNV in April, an increase of 1.5% over April 2023. RV Butterfly activity increased 19% over the same time period. Both products remain a valuable tool in helping BrokerTec traders manage their risk in April’s busier market.
