“The combination of quantitative tightening, increased collateral supply, and current rates market activity shifted more assets from the Federal Reserve’s reverse repo facility to money markets. Retail money markets activity was strong as markets priced in less aggressive Fed rate cuts.”
Tradeweb Markets has reported a total trading volume in April 2024 of $41.9 trillion, with an average daily volume (ADV) of $1.94 trillion, up by 69.1 YoY.
Among the metrics mentioned is electronic repo activity, which printed a new record driven by a combination of quantitative tightening, increased collateral supply, and current rates market activity. Repurchase agreement ADV was up 39.4% YoY to $598.2bn.
The trading volume metrics reported by Tradeweb include rates, credit, equities, and money markets. According to the fixed income, derivatives, and ETF electronic trading platform, these were the metrics for the month of April.
Rates
U.S. government bond ADV was up 70.7% YoY to $205.3 billion (bn). European government bond ADV was up 23.9% YoY to $45.6bn. “U.S. government bond volumes were supported by growth across all client sectors. Increased adoption across a wide range of protocols and favorable market conditions contributed to the increase in volume. The addition of r8fin continues to contribute positively to wholesale volumes. Robust primary issuance across Europe and the UK helped drive trading volume in European government bonds,” said the announcement.
Mortgage ADV was up 34.8% YoY to $206.1bn. “The continuation of elevated roll activity, together with a spike in volatility, contributed to higher ADV on our To-Be-Announced (TBA) platform, while increased client adoption contributed to strong volumes in specified pool trading.”
Swaps/swaptions ≥ 1-year ADV was up 118.9% YoY to $475.7bn and total rates derivatives ADV was up 127.8% YoY to $796.0bn.
Tradeweb stated: “Strong volume in swaps/swaptions ≥ 1-year was driven by ongoing institutional client activity in response to current global central bank policy decisions, as well as a 137% increase in compression activity which carries a lower FPM. Quarter to date compression activity is trending lower than 1Q24. Clients continued to utilize the request-for-market (RFM) protocol for larger risk transfers, while inflation and emerging markets swap growth remained strong.”
Credit
Fully electronic U.S. credit ADV was up 96.1% YoY to $8.0bn and European credit ADV was up 19.4% YoY to $2.3bn. “Higher U.S. credit volumes were driven by increased client adoption, most notably in request-for-quote (RFQ), portfolio trading and Tradeweb AllTrade. Tradeweb captured a record 19.7% share of fully electronic U.S. High Grade TRACE, and 7.3% share of fully electronic U.S. High Yield TRACE. Increases in European credit volumes were driven by continued client adoption of portfolio trading, unique dealer selection tools (SNAP IOI) and session-based trading.”
Municipal bonds ADV was up 20.8% YoY to $347 million (mm). Volumes outpaced the broader market, which was up roughly 6% YoY2. Institutional and retail activity was strong, with robust buyside activity amidst active issuance.
Credit derivatives ADV was up 65.0% YoY to $15.3bn. Increased credit volatility and credit default swap indices (CDX) roll trading led to increased swap execution facility (SEF) and multilateral trading facility (MTF) credit default swaps activity.
Equities
U.S. ETF ADV was up 24.8% YoY to $7.8bn and European ETF ADV was up 19.4% YoY to $2.8bn. U.S. and European institutional ETF volumes continued to grow as more clients embraced Tradeweb’s electronic RFQ protocol. U.S. wholesale ETF volumes also increased as the customer base continued to expand.
Money Markets
Repurchase agreement ADV was up 39.4% YoY to $598.2bn. “Increased client activity on Tradeweb’s electronic repo trading platform drove record global repo activity. The combination of quantitative tightening, increased collateral supply, and current rates market activity shifted more assets from the Federal Reserve’s reverse repo facility to money markets. Retail money markets activity was strong as markets priced in less aggressive Fed rate cuts.
