Recent Reuters article highlights the concern of treasury markets facing liquidity risks as the Fed runs down its balance sheet. While the Federal Reserve is starting to let bonds mature off its $9 trillion balance sheet, volatility is expected to pick up as the market already suffers from low liquidity. Jonathan Cohn, Head of Rates Trading Strategy, Credit Suisse said…
Recent Bloomberg article highlights US and European banks’ losses on sinking buyout debt. With the Federal Reserve rushing to hike rates, credit risk premiums are surging beyond levels seen before. Nichole Hammond, Senior Portfolio Manager, Angel Oak Capital Advisors comments regarding this issue “Banks agreed to finance deals months ago and we’ve had a massive…
Just over two years ago at the onset of the coronavirus pandemic, the majority were perplexed by credit trading algorithms. In fact, dealers turned off their algos and handled corporate bond trading over the phone and through instant messages. Now, traders say robots are better equipped to price bonds during periods of market stress, in…
Although fixed income markets have been underperforming, BlackRock projects global bond ETF assets under management to reach $5 trillion by 2030. As bond ETFs have been gaining traction during times of near-zero interest rates, the pandemic and inflationary pressures, Salim Ramji, Global Head of ETF and Index Investments, BlackRock credits these catalysts to a “more…
Recent Bloomberg article reveals the next challenge to hit markets – liquidity or the lack thereof. While the US is recognized for having one of the most liquid markets, liquidity has slowly been drying up in the markets. One of many reasons is attributed to the Federal Reserve tightening monetary conditions by raising interest rates…
Thus far, 2022 has accelerated many of 2021’s most significant trends. Inflationary forces have risen even higher, while bonds have cratered under higher rates. As of two weeks ago, the global bond index declined $2.6T, and corporate bonds have lost a staggering $1T in value. The “safe” primarily U.S. Treasury bond ETF (NASDAQ:BND) has declined by 7.3%, while…
There is an industry-wide modernization trend, much of which is driven by advances in the technology space over recent years. Investment firms are more comfortable migrating to the cloud, and there is a huge rise in the number of vendor platforms and industry standard tooling that’s available. I think we’re in a state of significant…
What are the benefits of using an execution management system (EMS) for fixed income? An EMS can offer connectivity to allow traders to manage and execute their order books electronically; however, that is not where the true value is realised. Unlike other asset classes, fixed income orders tend to be larger and even if they’re sliced into…
Pre-Trade Analytics: The Precursor to UMR Threshold Monitoring and Cross Asset Margin Management Whether you are a Phase 6 firm working to monitor your margin to keep under the UMR threshold come September, or a Phase 4, 5, or 6 firm looking to support cross-asset margin management; pre-trade analytics is essential to support the processes…
After enjoying a solid year of returns in 2021, allocators appear ready to head back to the hedge-fund well in 2022. French bank BNP Paribas, which surveyed 224 allocators representing $1.2 trillion in hedge fund assets, said in a report Wednesday that investors are expected to have met their average return target of 8.3 percent…
According to panelists at FILS 2022, algo and
