MarketAxess reports June total trading average daily volume down 18% y-o-y

“June and second quarter market trends reflect dramatically lower credit spread volatility versus the prior year same periods. The second quarter trading range of credit spreads for U.S. high-grade and U.S. high-yield bond indices was approximately 1/3rd of last year’s second quarter levels, reducing client activity for some segments of the market. Despite lower volatility, Open Trading share of total credit trading volume was in line with the prior year at approximately 34%, and we delivered estimated price improvement of $157 million5 to clients in the quarter. Client adoption of our growing suite of trading automation tools remains strong and estimated market share trends continue to be positive in our international product areas and municipal bonds.” Select 2Q23 highlights: U.S. high-grade average daily volume of $5.7 billion, with estimated market share of 20.7% reflecting the impact of a 17% increase in the new issue calendar compared to the prior year. U.S. high-yield ADV of $1.5 billion with estimated market share of 16.5%. Low credit spread volatility has reduced trading activity by ETF market makers in U.S. high-yield, with estimated U.S. high-yield TRACE market ADV down 13.2%. Emerging markets ADV of $2.7 billion decreased from $2.8 billion in the prior year; decrease of 12.3% in emerging markets estimated market ADV.2 Local markets emerging markets trading volume increased 10.7% to $75.0 billion and represented a record 44.1% of total emerging markets trading volume in the quarter. Local markets trading volume in the quarter benefited from a record $31.2 billion in June, representing a 31.9% increase compared to the prior year. 30.2% increase in Eurobonds ADV to a record $1.9 billion with a record 18.4% estimated market share, up from 15.1%. Municipal bond ADV of $389 million, up 4.8%, with estimated market share of 5.8%, up from 3.9%. Municipal bond market ADV decreased 30.1%. 34% Open Trading share4 of total credit trading volume. Estimated price improvement5 via Open Trading was approximately $157 million in the quarter and is $409 million year-to-date through second quarter 2023. The preliminary FPM1 for total credit for second quarter 2023 was approximately $157 compared to $166 in the prior year. The decline in total credit FPM was principally due to the mix of credit products, specifically the decline in U.S. high-yield trading volume which is the highest FPM product. The preliminary FPM for total rates was $4.80, compared to $4.21 in second quarter 2022.