FTSE Global Markets
With the corporate bond market still dealing with a pronounced demand-supply imbalance, newer protocols capable of connecting multiple sources of liquidity continue to grow in popularity—among them open or all-to-all trading solutions, designed to provide investors, dealers and other market participants with greater efficiency around fixed-income trades. Dave Simons reports from Boston.
Though absolute volumes within the still-buoyant corporate bond market remain in record territory, capital restrictions on large dealers have transformed what was once an ocean of secondary market liquidity into a mere wading pool (with levels currently 20% to 30% lower than in pre-crisis 2007 when taking into account the increased asset class size). In the US, dealer inventories have fallen from $8bn in 2007 to less than $3bn as of last year, according to Greenwich Associates data, causing average daily turnover to tumble 48% through the period.
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