Trader TV

Join Jo Gallagher in our recap of events and giving an outlook of trading activity and liquidity issues for the week ahead.

Listen as Jo Gallagher, Blu Putnam and Carl Tannenbaum gives us a global forecast of trading activity and liquidity for the week ahead.

Listen in as we give you a global forecast of trading activity and liquidity for the week ahead.

olatile markets will be the greatest daily trading challenge this year, according to J.P. Morgan’s 2023 E-Trading Survey, while access to liquidity is the biggest market structural concern. Recessionary risks have overtaken inflation and geopolitical issues as the biggest macro concern amongst traders, while machine learning is expected to have a significant impact on the trading workflow. We asked Scott Wacker, global head of e-commerce sales at JP Morgan and Gordon Noonan, global head of FX and European rates at Schroders, to tell us how the consensus in the research will translate into practical action on trading desks.

As rates rise and credit comes under pressure, selecting the right fixed income assets is key to optimising returns while managing risk. However, the liquidity picture for high yield assets, which have lower credit ratings than investment grade bonds, is harder to handle. Liquidity is key to trading out of positions as well as acquiring assets. Tom Hanson, head of European high yield at Aegon Asset Management, tells us how liquidity in these bonds has been performing in 2023, the risks that liquidity management can create in the investment process, and the value of traders, as part of the investment process to support high yield investment.

Podcast with Izzy Conlin, former trader and managing director for US credit at Tradeweb, says that the next evolutions of existing protocols allow dealing desks to scale up their trading capacity without having to reinvent how they trade. She tells us the best ways for traders to make their current workflows more efficient thanks to investment by trading platforms, which is mitigating any limits to resourcing on the buy-side trading desk.

Podcast with Howard Hoskin, global head of FENICS Invitations, explains how the request for auction (RFA) protocol, can offer buy-side firms can find liquidity it could not otherwise reach, at an attractive price via anonymous trading. By using FENICS’ interdealer broker network, it can help both dealers and clients to find the other side of a trade, in a way that other platforms may struggle to replicate.

Podcast with James Athey, investment director at Abrdn, helps us analyse the gilt crisis in late September, sell-side liquidity provision and the best approach to portfolio optimisation for macro portfolio managers this year.

Podcast of interview with Marjoirie Stiti of Lombard Odier. "So stretch yourself with different roles, different functions as much as you can. Trust yourself, your abilities, of course, challenge yourselves, get beyond discomfort. It is within your control and rethink your own job. You're only limited by your creativity and your own ambition as a goal."

Podcast with Chris Perryman of PineBridge Investments and Doug Blatch of Ninety One talk us through the approaches they took on behalf of investors, and the support offered by sell-side firms which became invaluable in stressed periods because of Russia’s invasion of Ukraine.

Podcast with Dwayne Middleton, global head of fixed income trading at T Rowe Price, Eunice Zhu, director and head of counterparty risk (XVA) trading at SMBC Nikko Captial Markets, and Shekhar Karia, managing director of equity derivatives at TP ICAP, help us analyse prejudice and bias within the trading environment.

Podcast with Luigi Marino, Valantic FSA, and Andy Wiblin, GLMX, talking about the serious concerns of the functioning of repo markests and how, for dealers, connecting their liquidity flows between D2D and D2C, improving analytics and digitalising manual workflows to reduce any operational friction can allow them to support clients – and manage risk – much more efficiently.

Podcast with Lee Bartholomew, head of fixed income & FX product research and development outlines the choices investors need to make, the access that Eurex’s own products provide, and the way for liquidity providers, investment managers and banks can get involved with Eurex’s ESG derivatives offering.

Podcast with Tod Van Name, Global Head of FX Electronic Trading at Bloomberg, discusses how to build and manage such a workflow that takes into account how fragmented foreign exchange trading is and how it can be aggregated into a single view and executed across efficiently.

Podcast with Kevin McPartland, head of market structure and technology research at analyst firm Coalition Greenwich, is in an expert position to break down exactly how electronic trading approaches are expanding across the credit and US Treasury markets, while also assessing the effect this is having upon buy- and sell-side execution quality for bond traders.

Podcast with Lee Batholomew, talking to us about how as FX risks have increased in 2022, traders have found it harder to manage those risks while maintaining efficient trading. Supported by regulatory tailwinds, the use of listed FX products has increased and consequently complemented the use of OTC and spot products.

Podcast with Angelo Proni, CEO of market operator MTS, on the impact of the UK's 'mini-budget' and the consequences and challenges within the government bond markets.

Podcast with  Ted Husveth and Tannia Munroe of Tradeweb talking about how portfolio trading is enabling a better management of execution risk for large baskets of trades simultaneously.

Podcast with Byron Cooper-Fogarty, COO of Neptune Networks, talking about looking at ways to link axe data to execution, via an existing or new multilateral trading facility (MTF) – or even by becoming an MTF itself.

Podcast with Nichola Hunter, global head of sales for fixed income at Liquidnet, says the impetus for change has led both buy and sell side firms to welcome Liquidnet’s new offering, which delivers new issue information more easily to buy-side client, then allows them to raise orders within their workflow and finally send those orders to syndicate banks.

Podcast with Kai Chang, senior trader at Ninety One, tells us how his career path developed into trading, the role and had in building the Asia Pacific trading desk at Ninety One, and how it has supported the development of greater diversity within the trading team.

Podcast with Emily Prince and Jon George of LSEG talking about how trading desks need help in aggregating data and managing the integration of information with pre- and post-trade processes, which service providers can provide.

Podcast with Sally Francis-Cole of London Stock Exchange Group (LSEG) and Andrew Batchelor of LCH ForexClear, An LSEG Business, discuss how dealers can optimise their capital and collateral management to actively reduce the cost of trading, by accessing clearing in swaps, forwards and NDFs.

Podcast with Stuart Brock, head of business development at oneZero, explaining how sell-side firms can boost the trading capabilities on their FX desk, and how that can directly impact performance.

Podcast with Nicola Danese, head of fixed income, and Colm Murtagh, managing director and head of US institutional rates at Tradeweb, review cash, swap and repo market activity in the rates space across European and the US so far in 2022, with a direct perspective on how and where traders have been most effective in finding best pricing and trade execution.

Podcast with Jay Moore, CEO and co-founder of FX HedgePool tells us how buy-side firms can find natural liquidity more easily, without needing to repaper with lots of new dealers, in order to better manage FX risk and trading costs.

Podcast with Dmitry Kay, co-head of EMEA and EM FX and short-term interest rates of UBS tells us how he sees investment firms fighting to overcome such risks, and what they should look for in a partner to lighten this burden.

Podcast with Max Callaghan of MarketAxess and Ramon Baljé of Flow Traders tell us how a close reading of data has allowed some traders to break free of old habits and find new routes to liquidity, through increasing the counterparties contacted for smaller sized trades, expanding the types of counterparties used, and by getting deeper into pre-trade analytics rather than relying on muscle memory alone.

Podcast with Lee Sanders, head of fixed income trading in the UK for AXA IM and Paul Squires, head of equity trading for EMEA and APAC at Invesco, talking about knowing where and how to access liquidity is the key skill of a buy-side trader and how they handled the drought by stretching the skills, relationships and tools at their disposal to the fullest extent.

Podcast with three highly experienced institutional bond traders: Chris Coccoluto of Manulife Investment Management; Mike Nappi of Parametric; and Anthony Cucinotta of Capital Advisors Group, to discuss how this market looked to buy-side trading desks, how they handled patchy liquidity and volatile prices, and which routes they found to deliver best execution for investors.

Podcast with Kat Sweeney of MarketAxess and Mark Makepeace of Wilshire Advisors and founder of FTSE Group give us their vision of the future for indexing.

Podcast with Victoria Bryan, senior analyst at Northern Trust Capital Markets, shows that candidates with a talent for maths can successfully follow a broader career path via business qualifications and still deliver excellent results in an analytical role for traders.

When trading into emerging markets, buy-side traders must pull together very disparate sources of information and use a wide network of counterparties in order to find liquidity and pricing. For investment managers moving into new markets, the ability to scale up operations based on existing relationship and technology can be challenging. For firms with an established presence, the capacity to increase engagement by volume or across markets is reliant on a network effect. Kat Furber, global head of emerging markets trading at Bloomberg, talks us through the paths a trading desk can take to grow new or existing EM trading capabilities through combined partnership, data and technology services.

Winifred Cisar Stieglitz, global head of strategy at CreditSights explains there are two trends in issuance across investment grade and high yield bond issuance in 2022. Not only is central bank activity through tighter monetary policy, triggering elevated volatility, there is an additional effect on investor appetite. For buy-side traders, this not only translates into management of new issues, potentially through competitive pressure but limited secondary market activity as they sit tight on portfolios. Major outflows in many asset classes will also create limited supply for the foreseeable future.

Dr Elliot Banks and Hamish McArthur in conversation. Dr Elliot Banks, Chief Product Officer, BMLL Technologies, explains the importance of Level 3 historical data for generating alpha and gaining a trading advantage.  He also discusses how Data-Science-as-a-Service enables capital markets participants to remove the time-consuming aspects of data science, so they can focus on value-add activities such as trading and investor modelling strategies.

In today’s fragmented markets, liquidity navigation is a challenge for all trading participants. Tony Shaw, executive director for the London Office and head sales UK & Ireland at SIX Swiss Exchange, shares insights about the behaviour of trading participants and their routing decisions when using conditional orders. With regards to Swiss blue chips, Tony Shaw points out that over a quarter of trades on dark multilateral trading facilities (MTFs) are executed away from the primary best bid offer (PBBO) midpoint price – contrary to SwissAtMid, where he notes that this is never the case. Using block orders in SwissAtMid should therefore enable participants to avoid trading at stale prices. Watch the full interview to discover which factors traders take into account when handling firm-up requests and how conditional orders differ between venues.

Institutional traders are engaging with retail order flow, as that market segment has boomed. The positive effect for both institutional and retail investors is to better support execution when order flow becomes highly directional – as the two demographics typically trade against one another. Wail Azizi, CSO of Equiduct, explains how investors can get access to retail liquidity, while supporting ESMA’s stance against payment for order flow. He talks through the analysis of best execution on Equiduct and outlines how institutional firms can engage with greater retail order flow today.

Buy-side bond traders increasingly want to automate and analyse their trading where possible, but need the data to do so. Paulo Costa of MarketAxess, tells us where there can be weaknesses in bond market data today, how data sources can potentially provide support for those areas, and introduces a new service, AxessAll prints, which is providing real-time bond pricing. In supporting best execution, data sources need to provide different levels of transparency across volume, pricing and size of trades. Paulo explains how the separation of different disclosures across data sources is potentially allowing greater clarity without leaking information which could prove detrimental to the trading desk itself.

Buy-side and sell-side traders need a range of trading execution choices in order to match the way they trade with market conditions, and liquidity availability. Chioma Okoye and Louise Oliver of Tradeweb outline the success that corporate bond (credit) traders have seen by trading with different protocols, and the interplay between manual and automated trading. Thanks to the close interaction between trading platforms and users, Chioma and Louise are able to discuss real-world examples of how portfolio, list and automated trading are being deployed in credit markets along with newer innovations including access to interdealer liquidity, pre-trade evaluation of portfolio trading and primary markets, through the facilitation of new issue processing.

The chance to apply mathematics can be a real attraction for a potential trader, but Kelsie Palumbo of T. Rowe Price also found that taking counterintuitive roles can be useful. By bringing diverse thinking to problem solving, moving into programming without a coding background allowed her to bring fresh eyes to the challenge. Kelsie tells us how a systematic approach to trading can be useful in fixed income markets, a model supported by her background in maths and computer science, but also emphasises that relationships are key, and there is a real need for diverse backgrounds and perspectives in building these.

Traders need to treat their data as an asset, and integrate it effectively into their workflows, so it can deliver better trading outcomes. Trading ecosystem provider, LedgerEdge, and Charles River Development (CRD), the order management system experts, have collaborated to bring the unique execution protocols that LedgerEdge offers alongside client data protection, with the broad range of services and tools available on CRD. David Nicol of LedgerEdge and and Vidya Guruju of CRD tell us how trader can expect to benefit from this partnership, and how they expect it to develop in the future for their clients.

Productivity gains on the trading desk across asset classes are driving increased use of automation, connectivity and information flows. In new research, LSEG and Coalition Greenwich have tracked the goals that traders are targeting and the best routes to achieving them. In this interview, Kevin McPartland and Quentin Limouzi look at the steps that trading desks can take to boost their own use of these new technologies and techniques in order to improve best execution outcomes. This means skill sets are changing and partners like LSEG are working more closely with clients to help support deployment of data, analytics and trading tools to help them optimise trading workflows.

As capital markets have been shaken by the Russian invasion of Ukraine and subsequent sanctions on Russia, along with trade route disruption and shifting investment flows, investment traders have faced unprecedented difficulties in their support for investors, as historical data is no longer viable in assessing risk. Carl James, global head of fixed income trading at Pictet Asset Management, tells us how his team have helped clients to effect careful investment management decision for credit and rates trading in challenging circumstances.

Buy-side trading desks can struggled to process and analyse data in the fragmented corporate bond market. Analytics tools need to connect with trading venues and direct dealer sources if they are to aggregate this information. They must understand different types of data and from different sources – in a timely manner – to build an accurate picture that can guide trading and support portfolio management. Ammar Sibtain and Paul Mutter outline how Lucera LumeALFA can combine pre-trade order routing information and execution management to deliver substantially more effective analytics, directly into the trading workflow, allowing traders to use their own and third party data, in order to see how and where to execute more easily.

In our #GenerationTrader series, Natasha Lauder of Schroders tells us how her career as a multi-asset trader evolved, from a background in physics which built her coding skills, into a data insights and analytics team. Her experience in technology and consultancy provided great experience in supporting trading through technology and analytics, leading to a start in FX trading. Understanding of the market and data allowed her to understand rates and emerging market credit. Significant differences in FX versus rates markets has further expanded her skills, applying her understanding of how data and applications can support different styles of trading.

Finding the right dealers, connecting with them and executing a trade without leaking too much information into the market pre-trade is a consistent challenge for the buy-side trading desk. Howard Hoskin and Paul Mutter of Fenics explain how new trading platform, Fencis Invitations, is launching to tackle each of these issues. Based on a ticking mid-price, Fenics Invitations allows buy-side traders to route anonymously to the interdealer broker network that BGC has developed, using a request for auction protocol. By Providing price certainty and supporting dealer-to-client relationships. the team outlines how they see Fenics Invitations supporting the liquidity development, initially in EM hard currency.

One week out mark for the 14th EMEA Trading Conference taking place here in London on the 24th March. Trader TV spoke with the FIX Trading Community, EMEA Regional Co-chairs Matthew Coupe and Rebecca Healey. The big themes at this year’s conference are ESG reporting, Digital Assets and a MiFID review.

The enhanced functionality available through new electronic repo trading tools enables far greater management of the trading and pricing workflow. As pure voice trading becomes an outlier to the combined e-trading and voice model, demand for electronic solutions are driving the expansion by instrument, geography and user demographic. Kat Dawson of MTS and Iain Colquhoun of TD Securities say that partnerships between dealers and repo platforms can help to bridge gaps in the market and ensure that sell-side firms are able to better manage their role as liquidity intermediary.

Managing risk for macro investments in the post-pandemic, inflationary environment confronted by war in Europe is a situation unseen in the lifetimes of most people. James Athey, senior investment manager at Abrdn, outlines the pattern of events that are likely to drive up inflation even further this year, the challenges volatility creates in managing these risks – for example in identifying risk exposure – and the difficulty in seizing opportunities where they do arise. Positioning will potentially be a bigger driver of performance than fundamentals.

Buy-side trading desks are finding they are able to use ETFs in more dynamic ways as fixed income market makers increasingly support the use of exchange traded funds (ETFs) as well as cash bonds, loans and derivatives. Access is further supported on trading platforms as list trading, portfolio trading and pre-trade transparency allow traders to narrow down potential liquidity providers, delivering a more efficient liquidity and price formation process, and ultimately better execution for traders. Adam Gould, global head of equities at Tradeweb, says the firm’s experience across equity and debt markets creates a solution that is greater than the sum of the parts, allowing the end users to benefit.

Automation can be used to manage trades with very different best execution objectives. Charlie Campbell-Johnston of Tradeweb gives us real world examples of how to use automated trading to minimise market impact, maximise order size fulfilment and integrate these actions into a trading workflow. This evolution of trading outcomes allows automation to support execution for asset classes with very different liquidity profiles, further supporting the access to automated trading on buy-side trading desks.

In the first of our #Generationtrader series, in which we explore the increasingly diverse backgrounds of team members on the trading desk, Evan Canwell of T. Rowe Price tells us how his background in physics transferred to working on the trading desk. Evan explains how he was helped into the business through training, through his employer’s investment fellowship programme, via qualifications and team collaboration. He also gives his perspective on how diversity is increasing within trading, and where diversity in trading still needs to improve. #Generationtrader

We spoke with attendees at last year’s TradeTech, WBR’s leading equity trading conference to pick up the big themes under discussion, what was taken away from 2021 and what we might expect to continue into 2022.

Many buy-side traders will not have seen an inflationary environment before, and with central banks balance sheet and risk appetite carrying impact along with interest rate, even experienced investors may not have experienced a market facing the volatility predicted for 2022. Scott Kimball, co-head of US Fixed Income at BMO Global Asset Management, explains how vol has crept into bond markets and how the retail access to bond markets though mutual and exchange-traded funds will affect investor flows and risk. As a relative value investor, Scott also talks through the pros and cons of accessing liqudity in the primary vs secondary markets.

Chris Bruner of Tradeweb gives us a snapshot of market evolution towards automated trading in the corporate bond space. From new trading protocols to enhanced data access, buy- and sell-side firms with the right skills and tools can automate parts or all of their trading workflow in 2022, bifurcating larger risk trading from more electronic execution. However, the distribution of this is not even and Bruner picks out where traders are likely to get most value from automation, and what they need to do so.

The buy side faces multiple challenges: from keeping up with regulatory and technology change to growing capacity while managing costs. Mark Goodman, Head of UBS Execution Hub and Platforms, explains how partnering with an outsourced trading provider can help the buy side to respond to this, support growth and expand into new asset classes and regions.

Capital markets firms are at a critical point of the LIBOR transition. Switching to risk free rates from LIBOR has many hazards, such as adjusting to the compounded method of calculating interest rates, onboarding systems that can handle that model, and getting the right pricing sources to capture market data. Passive transitioning of existing positions gives asset managers less control over their portfolios than an active transition, says Bhas Nalabothula, head of institutional rates at Tradeweb, as the active model allow portfolio managers to better reflect existing risk in a new set of positions. With so much change occurring around rate policy and year end it is easy for firms to fall behind on the process, Nalabothula notes, and gives examples of how some firms are making the best of the process.

Buy-side firms can create better opportunities for generating returns and hedging risk if they are able to engage in derivatives markets effectively. In this interview we look at the groundwork needed for an investment manager to trade derivatives, from the agreements with counterparties to minimise friction, the access to listed and OTC markets, and the trading capabilities. Discussing best practice in this space are James Wallin of AllianceBernstein, Phil Lloyd of NatWest Markets and Lee Bartholomew of Eurex, speaking with Ruth Emery of Trader TV.

Institutional traders need to think about how their FX liquidity providers can offer better pricing through unique order flow, from a combination of underlying trading across diverse institutional and retail traders. If liquidity diversity is not supported, that creates very unpredictable trading costs in volatile markets and ultimately hurts investors. Artur Deliergiev, quantitative trading manager at CMC, explains how CMC Markets Direct delivers diversity through smart management of diverse order flows and risk management, and the risks of trading against non-diverse liquidity.

The profile of bond traders is changing, as quantitative skills and data management become as important as relationships and counterparty engagement. This has a material effect on the way trading occurs, but does that improve execution quality? Gareth Coltman, Global Head of Trading Automation at MarketAxess explains that there is a direct correlation as traders can reduce high-volume, low-value trading activity using electronic execution, and improve analysis of trade execution quality, allowing more time to focus on the higher value tickets and a better understanding of which counterparties to work with.

The AT1 bond has a very global market, reflective of the investor types who wish to use these bank-issued convertible instruments. However, as they are particularly sensitive to US Treasury movement as a result of their call and reset features which are based on futures rate moves, trading in them can be challenging in the current environment. Invesco’s AT1 Bond Exchange Traded Fund captures the USD denominated bonds, with over 80 issuances targeting the most liquid bonds, so investors can benefit from subordination and a 350 basis point Z spread. Deepak Bharti and Rob Simnick from Invesco discuss how investors are using this instrument to trade into the AT1 market most effectively.

Axe distribution platform Neptune, has seen a 500% growth in the volume of axes and notional sent from dealers to clients since its inception in 2016. Now averaging US$55billion a day. We caught up with John ‘Coach’ Robinson, the firm’s new CEO, and COO Byron Cooper-Fogarty about the influx of activity and new trading participants, and asked them why traders are engaging so keenly and what their growth plans are for the next year.

ICE’s pricing, analytics and market data has been incorporated into the AxeTrader Quoting and Execution Management System (QEMS) to allow users access ICE’s pricing and analytics tools, including end-of-day evaluated pricing, continuous fixed income evaluated pricing, best execution services and ICE Liquidity Indicators. ICE Liquidity Indicators can help in quantifying security and portfolio liquidity across fixed income and equity asset classes, while ICE’s Best Execution Service can help customers manage and measure bond trade execution quality and support them with their assessment of regulatory compliance. Mark Watters, CCO and co-founder of AxeTrading and Stephen Baker, global head of Sales of Fixed Income and Data Services at ICE discuss the demand from traders and other investment professionals for more informed and efficient decision making, and the capability that AxeTrader QEMS provides with dealer-grade pricing through a user configurable quoting engine and the addition of ICE’s pricing and analytics tools deepens the resources available to AxeTrading customers.

Bloomberg has developed pre-trade analytics to support transaction cost analysis and execution quality analysis, which can be embedded within existing trading tools and workflows. Not only are these an assist to high touch traders, explains Ravi Sawney, global head of trade automation and analytics at Bloomberg, but they can support the transition to greater trade automation for bond traders. Speaking at the Fixed Income Leaders Summit in London, Ravi talks through the latest evolutions of Bloomberg’s analytics, their integration into BTCA for post-trade support and the latest research on bond trading automation.

LedgerEdge is a trading ecosystem initially supporting trading of investment grade and high yield bonds in the UK and US. Its distributed ledger model is designed to allow traders to control the amount of pre-trade data they release, while still helping them to find the other side of the trade. By tackling liquidity fragmentation and information leakage, the firm believes it will also increase certainty of price discovery, hitting three structural bond market problems in one. David Nicol, CEO of LedgerEdge and Michelle Neal, CEO of US operations, explain what traders will be able to do from day one of LedgerEdge going live, and how the system will expand to other asset classes and markets.

As traders become more confident in their use of different electronic trading protocols, they need clarity on when and where to use them. Pre-trade tools are providing real support in this area as more formal ‘decision trees’ and less formal qualitative assessments are both used to assess the path to best execution. Gareth Coltman, global head of trading automation at MarketAxess, tells us how buy-side firms are establishing best practices to get more efficient at selecting the right protocol, including better pre-trade analytics and increased automation.

New issuance and tight spreads in central and eastern Europe have created positive liquidity conditions for bond investors, while supporting banks in their market making activities, giving them confidence in their ability to offset risk. Looking at the last quarter of 2021, Cathy Gibson, global head of trading at Ninety One, outlines the key drivers of liquidity in the region, the risk factors that could impair access to efficient trading, and the routes her team is taking to achieve best execution on behalf of their investors.

Rethinking the market structure of FX could allow significant cost savings and risk reduction through more effective provision of liquidity. Market impact of large hedges – and even smaller trades – can have an outsized effect on trading costs through traditional channels. As a result, say Jay Moore CEO of FXHP, a model for banks and client to use that reduces the need for credit and risk to be provided to the buy-side by the sell-side is proving a massive success with over US200 billion traded a month.

Data is fundamentally what bond traders use to see the market at any given moment, yet its quality, its type and its value are highly variable. If a buy-side bond desk wants to deliver better execution and even generate alpha for investors, it will need to have a strategy in place to manage data and the picture that it paints so traders can use it effectively. As traders are very time constrained, asset managers need to consider how they can be given confidence in the data being used, without tying them up. Daniel Mayston, head of electronic trading and market structure at BlackRock, and Guido Galassi, head of cash and data product management at MTS Markets, discuss best practice in acquiring and using data in fixed income markets, without impeding the traders themselves.

Data paints the picture of liquidity and price formation for FX traders, and its understanding is key to the trading desk as firms increase their automation of processes – and management of higher touch trading – within FX spot and derivatives markets. Refinitiv’s Bart Joris and Alex Goraieb discuss how transparency, execution and efficient workflows on FX Trading Desk all start with data.

Transparency issues need to be addressed in the last-look process if FX trading is to deliver best execution fairly. Analytics can help users to understand the types of flow they are sending to liquidity providers and then make informed decisions on how to route orders between liquidity providers. Dennis Weissert and Stuart Brock of oneZero outline the barriers to transparency and how to overcome them.

Concerns around default risk at property developer Evergrande are having wide ranging effects on investment in the sector, and across China’s bond markets. While headlines talk of a ‘Lehman’s moment’ many investment managers are looking at opportunities created as other investors withdraw. Chris Perryman, senior portfolio manager and head of trading at PineBridge Investments, talks us through the process of assessing opportunity versus risk in the sector at present, and the level of concern that portfolio managers should be cognisant of as the situation progresses.

Portfolio trading was conceived as a way of managing larger trades for institutional investors in the exchange-traded fund (ETF) space, however, it is increasingly being used for smaller sized trades across new instruments in the fixed income landscape and by an ever increasing set of different trading counterparties. This variety is creating new opportunities for traders to access liquidity, says Ted Husveth, managing director of US credit at Tradeweb, who reveals that portfolio trading is taking off in new markets, for different types of firm and with a greater range of trade types than was ever expected.

Digital bonds can offer faster, more efficient issuance with greater transparency. They could also offer fractional investment into fixed income new issues, potentially increasing the level of retail investor engagement. Adam Coons, portfolio manager at Winthrop Capital Management tells Ruth Emery there are major advantages to digital bonds, but also a potential impact for institutional investors and regulatory hurdles to overcome.

Buy-side bond traders have seen the effect of rate changes in the US across the global markets. It has been hard to navigate the Federal Reserve’s moves, and asset managers and buy-side traders have seen volumes in rates and credit drop – particularly over summer – impacting liquidity in some bonds. It is often harder for traders to show ideas to portfolio managers in these circumstances, but Mike Nappi, director for investment grade trading at Eaton Vance, tells us how his team have been supporting investment decision making – and therefore investors – over this period.

The Federal Reserve is likely to taper asset purchasing towards the end of 2021, says Ben Lord of M&G, and other central banks will follow, leading to higher rates and pushing down inflation expectations. One consequence is that corporates are not issuing inflation linked bonds and the UK’s Debt Management Office has been running down the proportion of index-linked bonds being issued. Another is that, as governments are significantly in debt, quantitative easing is likely to continue for some time in order to minimise the impact of that debt upon the public purse. Real yields are negative and that means an increase in inflation might lead investors to look for index-linked bonds and to take additional credit risk.

Only 5% of buy-side bond traders use an execution management system (EMS), despite real advantages they can offer. These include enhanced timing and greater scaling up of trading activity. Opportunities are being missed today, as instrument selection can occur without the right levels of pre-trade information on liquidity and price being made available to the trading and portfolio management teams.

Developments in execution management systems (EMSs) have enabled equity traders to adapt their trading tools using Python coding. This can allow for more efficient flowing of data through the trading and investment workflow, and ultimately lead to greater levels of automation based on a trading desk’s own execution model.

Developing a consolidated tape of post-trade prices will be at the core of the European Commission’s (EC) review of the MiFID II rules which came into effect in 2018. Since the departure of the United Kingdom (UK) from the European Union (EU), the UK’s market regulator has consulted on the development of a tape for its markets.If European firms are to manage two tapes – one for the UK and and one for the EU – the effects of consolidation, such as lower data costs and standardised data formats, could be signfnicantly reduced.We asked Christoph Hock, head of multi-asset trading at Union Investments, Jason Waight head of regulatory affairs for Europe at MarketAxess and Stephane Malrait, global head of market structure and innovation for financial markets at ING Bank, how the developments might pan out and what effect that could have upon buy-side and sell-side traders.

The dilemma between self-regulation and supervised regulation will be key to development in the special purpose acquisition (SPAC) vehicle space. The interest of the US’s Securities and Exchange Commission (SEC) in the sector curbed its recent growth trajectory. Yet the US has very rich financial regulation for SPACs, says Daniele D’Alvia, CEO of SPAC Consultancy, and Europe sees very varied levels of flexibility, making for a patchwork of opportunities. The destruction of value by certain SPACS during the de-SPAC process, in which an acquisition is made, is a concern for investors, but confidence in the SPAC’s management is the primary measure which can address this issue, and D’Alvia presents evidence to Ruth Emery that more experienced operators have delivered materially better performance than inexperienced leadership.

Giving the buy-side easy access to complex products is very rewarding, but challenging. For sales traders to offer complex products to investment managers their trading workflow needs to incorporate sophisticated analytics and strong data, with either easily accessible or embedded risk calculations. Sell-side adoption of tools including AI and ML is enabling some sales teams to boost their capabilities, in terms of product range and service levels to clients, say Pontus Eriksson, Aite Group‘s Spencer Mindlin and Stifel Europe‘s Paul Makepeace.

Getting the best-of-breed tools to work together on the trading desk can deliver the advantages of highly electronic trading to less liquid markets. Data, analytics and order management collectively deliver best execution, which has driven IHS Markit’s thinkFolio, Neptune Axes and Lucera’s LumeALFA Analytics to team up to deliver optimal pre-trade insights for buy-side traders. In this interview, Brett Schechterman of IHS Markit’s thinkFolio, Byron Cooper-Fogarty of Neptune and Paul Mutter of Lucera outline the capabilities delivered through this partnership, outlining the challenges facing fixed income traders today, and the opportunity afforded to them by working with the three firms.

Managing high and low touch trading smoothly gives buy-side clients a much better idea of execution quality and what is necessary to optimise it. Yet there are several challenges. We hear how AI and machine learning are being to used to deliver more seamless sell-side services from Pontus Eriksson, Aite Group‘s Spencer Mindlin and Stifel Europe‘s Paul Makepeace, These technologies support the feedback loop of data that helps to optimise trading outcomes and service quality. Our other interviews in this series include the electronification of trading and execution performance and the capacity to trade complex products efficiently.

Investor interest in emerging markets (EM) is adding pressure on thinly-stretched buy-side resources. With over 80 countries accessible in the emerging market space, expanding operations or starting afresh in EM investment and trading creates many choices. Reducing the friction of EM operations allows asset managers to access these markets without increasing resource pressure, and increasing the pace of engagement. Tannia Munroe, Director and Emerging Markets Product Manager at Tradeweb, highlights some quick efficiency gains that buy-side firms can seize across asset classes. EM markets are more mature in their adoption of electronic trading, and that allows rapid expansion of existing platforms and interfaces, with familiar tools and protocols.

Pontus Eriksson, Aite Group‘s Spencer Mindlin and Stifel Europe‘s Paul Makepeace discuss the ability for dealers to improve their service to buy-side clients through several key factors. The first is the electronification of trading and execution performance, which supports a feedback loop to optimise outcomes. Underpinning all of this is the engagement with new technologies, in order to evolve the sales and trading function into a leaner and more flexible operation. Our other interviews in this series include the ability to manage both high and low touch trading with minimal disruption or manual intervention, and the capacity to trade complex products efficiently.

As Wise goes public in London with a direct listing, we ask Simon Olsen, equity capital markets partner at Deloitte, how direct listings work compared with traditional initial public offerings (IPOs), what the process means for investors, existing and new. The pros and cons are laid out in a broader discussion with Ruth Emery, alongside a discussion of the trends in IPOs, higher levels of newly issued listed stocks and the effect of inflation and rates on new issues over the next 12 months.

The new bond price distribution models will help sell-side firms deliver what clients need; this could significantly increase trading efficiency. This initiative, driven by the ICMA, will standardise the flow of price information from sales trading desks to investment managers, making it clear how firm prices are. Having greater certainty over pricing could support greater electronification and automation of bond trading, and will also help traders to review execution quality more effectively. Ricky Goddard, head of credit trading, EMEA for Schroders, explains what the new guides will mean for traders, in our latest review of credit trading and market events.

Time to take your bond trading to the next level with the cutting edge of fixed income trading technology. The AxeTrader Quoting and Execution Management System is the dedicated fixed income trading software that enables unique market making, quoting, bond pricing and order execution on a single desktop. It provides exceptional aggregated liquidity, multiple pricing feeds, powerful client servicing and execution capability across voice and electronic trading. The userconfigurable quoting engine is designed for today’s market and modern business needs, enabling users to move beyond legacy technology.

May was a difficult month for some investment firms as spreads in hybrid corporate debt increased, which impacted performance, but opportunities were to be found in subordinated debt markets. The big risk in European credit is duration, the sensitivity to interest rate changes, and this risk is dependent on the US Federal Reserve’s activity, and US Treasuries and a question mark over French debt. As Eric Vanraes believes investment managers need to consider handling the challenge of low yields and liquidity via hybrid-corporate bonds, subordinated debt and long-dated IG bonds, with duration hedged via a short position in the futures market.

In May 2021, 62% of notional US treasury trading was on electronic order book, meaning order book volume in lower in US Treasuries as an overall proportion of trading than it had been at pre-pandemic levels. At the same time volatility has remained low, which collectively may suggest high-frequency trading firms are less involved than they have been historically. US Treasury markets are potentially facing greater regulation, and while the speed at which changes may be enforced by a very busy regulatory market, the effect of central clearing could be to better support all-to-all trading. Kevin McPartland, head of market structure and technology research at Coalition Greenwich, sees great appetite for change, but markets have hit an equilibrium.

Retail investors can see real advantages by accessing initial public offerings, while firms engaging in IPOs can get more engaged investors by creating access to non-institutional investors. Sam Lawson, VP of capital markets at Crowdcube, tells Ruth Emery how his firm’s new service, expected to launch in August, should support retail investors in their ability to reach new opportunities, and how firms launching new shares are finding that the retail segment of the investment community is helping firms to build capital and see greater value from their equity offerings.

Rates markets at the start of Q2 began to see the effect of inflation concerns, along with central bank responses. While the solution to inflation is to increase wages, says Eric Vanraes, head of fixed income investments at Banque Eric Sturdza, the temporary financing of private income is the existing stop gap. The slope of the curve in European and US is starting to steepen. If spreads for credit are so low they behave as a proxy to government bonds, investment managers need to consider which fixed income instruments will offer the best returns in a potentially volatile environment without significantly increasing the risk profile of portfolios.

Across asset classes the electronification of trading is leading to increased levels of automation, but are some trades impossible to automate? If you start from the right place, automation can be added in part at least, to mast trades argues. Charlie Campbell-Johnston, head of integration and workflow solutions at Tradeweb. He says that the successful automation of any part of the trading workflow must begin with a clear view of investment and trading goals. Traders can then potentially add automated elements, across the spectrum of asset classes, if they can pinpoint the data needed to determine the outcome of a trading decision, and that decision is well-defined. The upside can be considerable, leading to increasing numbers of enquiries from trading desks with potential partners.

The trend to green investing is leading to tighter spreads for investors as they compete to access these securities, with a perceived higher value. This so-called ‘greenium’ is delivering better value to issuers, encouraging them to ensure their debt issuance is complaint with environmental, social and governance criteria, explains Noelle Cazalis of Rathbone Investment Management, speaking with Ruth Emery.

If a firm goes public via its acquisition or merger with a special purpose acquisition vehicle (SPAC), instead of an initial public offering (IPO), it may be subject to very different rules around disclosure and business practices. Depending upon the jurisdiction, this can mean risks to investors are less visible, or business models may be more opaque. Jonathan Price, visiting lecturer at the London School of Business and Finance, outlines key points that investors need to consider when picking equity in the primary markets to Ruth Emery.

Supply in Q1 2021 was second only to 2020, with plenty of demand for bonds and opportunities in the market for traders with the right reflexes and investment processes in place, such as big names with bonds trading at 80 cents on the dollar. Tim Kurpis, head of investment grade credit trading at AllianceBernstein, says fewer opportunities – and concessions in new issues – meant more value was seen in secondary markets although primary still took up a lot of buy-side workload on the trading desk. With good workflows across trading, portfolio management and risk, plus investment in technology such as execution management systems, can create the efficiencies needed to seize the right investment opportunities – or speed alpha in AllianceBernstein terminology.

Spreads in emerging markets have proven resilient to Federal Reserve rate moves in March, with ‘wobbles’ but no major impact, however traders have had to tweak trading execution in order to manage those, says Chris Perryman, corporate portfolio manager and head of trading at PineBridge Investments. Relative to the volatility of March 2020, traders have been focused on fundamentals and spotting any curve anomalies to identify relative value opportunities. Buy-side traders see their role as price taker changing, due to sell-side focus on risk transfer than risk taking, which reduces the length of time momentum affects the market, via volatility and outflows, due to a more stable base of asset holders. As a result investors can take longer term views of EM based on fundamentals he notes.

The shift of equity trading from London to Amsterdam may be permanent – but it isn’t terminal. In our look at European equity trading Anish Puaar, market structure analyst, Europe at Rosenblatt Securities, outlines the real shift in equity trading is a reversal of European shares being traded in London, which had benefited from the MiFID’s 2007 ruling that allowed shares to be traded away from their home market. As this European order flow moves back to the continent, questions are arising around future divergence of regulation, particularly with the European Commission’s plans to revise MiFID II later this year.

Understanding potential bond issuance can be invaluable to investors and buy-side traders planning ahead. Overbond, the pricing and liquidity analytics platform provider, has tracked a tail-off in issuance into March, which CEO Vuk Magedelenic notes is partially explained by rising bond yields and associated funding costs. His firm has developed a tool to gauge the new bodn issuance by corporates which he believes will better support buy-side firms in their investment processes.

Higher yielding assets – from a true yield perspective covering BBB credit to certain emerging market assets – are proving highly attractive at present and there are parts of those markets where investors need to be very cognisant of liquidity issues. Risk transfer can be more difficult as dealer often hold less balance sheet for this part of the market. There has been a significant growth in the use of single name credit default swaps (CDS) and exchange traded funds both defensively and aggressively in high yield but inexperienced investment managers may not see the risk in the market, particularly with limits to Federal Reserve intervention, notes Scott Kimball, co-head of US fixed income at BMO Global Asset Management. David Parker, head of MTS Markets International, highlights the advantages that electronification of the market can bring, and together they discuss how better trading can support returns for high yielding portfolios.

In our review of February’s rates markets, we look at trading in US Treasury securities which saw a significant sell-off at the end of the month. The shift in repricing to the front end of the yield curve was the defining issue in February’s rates markets, says Greg Faranello, head of US rates strategy and trading at AmeriVet Securities, and price action in the market appears to challenging the Fed’s premise.Lessons to take forward include a review of market structure, with a need for a broader-based and more inclusive sponsorship of the Treasury market in the future to underwrite the ton of debt being issued.

In February corporate bond trading volumes were relatively quiet for KBC Asset Management, and the market more widely was low and patchy, with tighter spreads. Transaction costs were relatively unaffected from recent months but were two thirds the level of February 2020. Joeri Wouters, senior fixed income trader at KBC AM, says his team were able to take advantage of the quieter markets to kick off three new projects including rule-based trading for Euro-denominated credit which delivered 85% automated trading which potentially could replace its use for all-to-all trading, plus a model-based counterparty prediction tool.

Retail trading platform eToro has seen considerable success as the trend towards direct trading increases, with over 20 million registered users. Now, in a merger with the special purpose acquisition company (SPAC) Fintech Acquisition Corp V, which values eToro at US$10.4 billion, it will become a publicly traded firm. We caught up with eToro’s CEO Yoni Assia to discuss how the process worked and what investors thought about going public via a SPAC deal.

Increased retail market participation and stronger valuations have been supported by new issues, particularly in mining and technology, leading the Canadian Securities Exchange to have a record year in 2020; leading the firm to a positive outlook for the anticipated post-pandemic market later in 2021, says Barrington Miller, head of issuer engagement at CSE.

The challenges of trading emerging markets (EM) are offset somewhat by the higher yields available, but even more so when the traders can mitigate trading costs through better execution approaches. Spreads in EM bond markets are more affected during periods of volatility than developed markets, making the role of the buy-side trader vital in delivering investment goals. The traders themselves need access to the right data, the right relationships with dealers and the right electronic trading tools to find the optimal pathway to best execution. Tom Nickalls, fixed income trader at asset manager Ninety One and Craig McLeod, head of emerging markets at MarketAxess outline the key elements that can help investors get better EM returns.

In the US, growth and inflation expectations with additional Government stimulus will increase demand on goods and services, while rising rates and positive rate expectations are making the yield on new bonds more attractive. While participation in last Friday’s US Government bond auction was at record lows, the impact on other bonds will depend on their sensitivity, and typically their rating as investment grade / high yield. For investment managers allocation to rate sensitive bonds can be problematic, as can passive strategies or restrictive mandates which limit the responsiveness of a portfolio manager. Jeff Rosencranz, fixed income portfolio manager at Shelton Capital Management outlines his approach to managing these risks.

In January, investment opportunities in the primary and secondary government bond markets allowed M&G to tap into new issue premiums and reduce risk in the local emerging market currencies, while also reflecting optimism around growth prospects in developed markets.. Eva Sun-Wai, fund manager for the M&G Global Government Bond Fund and deputy fund manager for the M&G Global Macro Fund, updates us on the need for reactive investment trading capabilities in rates markets this year.

Central banks are impacting primary and secondary market activity in their role as rate setters and bond buyers. The potential for a taper tantrum – in which yields surge as central banks reduce asset purchasing – is potentially a risk for investors over the next year and into 2022. Shane Balkham, chief investment officers at Beaufort Investment explains when and how investors should prepare in consideration of new and existing bonds.

Brexit had less impact on volatility, but non-sterling investors moving into the UK markets with a pick up in supply across dollar and sterling markets has led to increased volume. Execution in dollar has polarised across big tickets via dealers and smaller tickets on electronic platforms, particularly via all-to-all. Sterling has been more voice based, with EM and high yield following suit. So many new entrants into the bond markets are driving up liquidity but many disruptors are now the incumbents, says Lee Sanders, head of FX and FI trading for AXA Investment Managers, creating interest in new ways of working.

The increasing frequency of liquidity problems in repo markets – very obvious in the March 2020 sell-off – have been exacerbated by a low adoption of electronic trading and regulatory limits on bank balance sheets. However, over the past year e-trading of repo has boomed, says Erica Barrett, managing director of institutional rates at Tradeweb. As buy- and sell-side firms have adopted e-trading market operators are forming hubs that bring multiple liquidity providers together, despite the challenges of hooking up the unique workflows that trading desks often use.

In Latin America yield curve began steepening last year as Latin American central banks slashed rates to record lows across the region, and export prices are rising in many countries, but currencies are decoupled from export prices. Existing bonds have benefited from price appreciation, while issuers can issue short term debt at low rates, although debt issued further along the yield curve has become more expensive as investors anticipate a recovery. With central banks issuing debt at or below the rate of inflation then continued economic weakness could lead to price appreciation further along the yield curve. Erik Norland, Senior Economist at the CME helps us to understand the link between these economies and fixed income portfolios.

Transaction cost reports can mislead pension fund trustees, so how can they measure the impact of trading on their investments? Under MiFID II, since 1 January 2018, trading costs and execution quality have been reported by European asset managers, yet these numbers are widely considered to be a shallow reflection of trading quality, or even misleading. For pension fund trustees, who are likely to manage multi-asset portfolios, the complexity of reports for trading across different instruments can be substantial. Rachit Sharma, investment director of RPMI Railpen and Carsten Just, head of fixed income trading at Nordea Asset Management discuss the role of trading in the investment process, outline how execution quality can be measured both quantitatively and qualitatively, and consider how trustees can use this information to make better decisions.

Deals have seen a lot of support from investors this year, giving a great start says Santino Bibbo, managing director of Cabrera Capital Markets. With around US$130 billion priced in investment grade US new issues over the past month, one new issue from retailer 7/Eleven being launched in Asia and being six times over subscribed by the time the deal reached the US that day, and US$6 billion of inflows into bond funds, the numbers support this. Adding value to a deal requires his firm to reach out to the 400 investor accounts – including smaller firms by assets under management – and ensuring that the breadth of investors increases pricing and liquidity transparency in the deal. Strengthening relationships with large broker dealer firms and focusing on the capital structure of clients will be core to growth over the next 12 months, Bibbo explains.

Analysis from Greenwich Associates found several days with over US$1 trillion in daily volume, beating previous record s by about US$200 billion – yet volumes were only us 2% year of year. Government intervention had a significant impact in calming markets, but also the interdealer market on central limit order books were collectively down, while dealer-to-client platforms saw greater rises. Kevin McPartland, head of market structure and technology research at Greenwich outlines the reasons behind activity in rates markets over 2020 and across the year end period.

A macro rebound in China has buoyed investor sentiment for China. While the government is focused on deleveraging the economy and providing localised support to assuage default concerns, which were rising last year, Jason Tan of CreditSights says that credit risk has increased amongst property developers and smaller banks. As onshore liquidity is still supportive, and offshore liquidity via channels such as China Bond Connect is also growing, financing costs are being kept low and so investors are gathering comfort about Chinese debt in their search for yield.

Appetite for access to Chinese debt markets is well distributed around the rest of the world, and as Chinese bonds are included in more indexes the level of inbound investment activity is increasing significantly. Accessing the market can be more complex, but as electronic trading grows, a more diverse investor base will be able to gain access to Chinese assets in more efficient ways. Li Renn Tsai managing director and head of Asia at Tradeweb, outlines the different access routes that have opened and what effect these will have for traders.

Erin Lyons, co-head of US investment grade research at CreditSights tells us where the risks lie for new bond issuance, how investor appetite influences that and why share buy-backs might drive additional debt into the market. Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Poor access to usable data can impede buy-side bond traders and portfolio managers as they strive to achieve investment goals and best execution. Mike Beattie, director of product strategy at Charles River Development and Chris White, CEO of BondCliQ believe traders can avoid being let down by service providers through an integrated approach to data sourcing and analytics. This model sees the integral value of sell side price makers, data and analytics aggregators and order management system providers in the trading workflow to ensure all parties are abel to benefit from better data. Trader TV spoke to Mike and Chris about their partnership and the advantages this approach yields to their clients.

Where will securities be issued in 2021 following Brexit and US election? Charlie Walker head of equity and fixed income primary markets at London Stock Exchange Group and Eric Vanraes, head of fixed income investment and Banque Eric Sturdza give us their perspective on the avenues for issuer appetite and investor appetite to flow this year.

Dickie Wong, executive director for research at Kingston Securities, tells us which sectors will thrive in 2021 for new issuance, including the effect of regulatory changes that have slowed the IPO of Ant Financial on other fintech firms.

Anish Puaar, equity market structure analyst at Rosenblatt Securities, looks at several factors that are affecting best execution in Q4 2020 – including operational failures at major exchange. A review of the data reported under MiFID II has found that few of the reports deliver value – although there is some gold hidden within. We assess how buy-side equity traders are able to navigate regulation and market structure in order to deliver better execution for investors.

Charles MacGregor, head of Asia at Lucror Analytics, and a Smartkarma Insight Provider, gives us an update on new bond issues in China, discussion of recent defaults and a perspective on investor appetite for bonds. IPOs expected this week: Australian Stock Exchange: Control Bionic; Dalrymple Bay Infrastructure; Desert Metals; Live Verdure; You Foodz; Rincon Resources; Akora Resources; Errawara Resources; Cluey; Top Shelf International Holdings. Hong Kong Stock Exchange: Yue Kan Holdings; JD Health; Jiayuan Services; China Resources Mixc Lifestyle Services; HBM Holdings; Leading Holdings; Datang Group Holdings; Pop Mart International Group; Lion-OCBC Securities Hang Seng TECH ETF. Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The full global update on newly issued equities and bonds this week, across Asia Pacific; Europe, Middle East and Africa and the Americas this week, with: Charles MacGregor, head of Asia at Lucror Analytics, and a Smartkarma Insight Provide Dr. Sebastian Raedler, Head of European Equity Strategy at Bank of America Merrill Lynch Barnaby Martin, European, head of European credit Strategy at BofA Merrill Lynch Erin Lyons, Co-Head US investment grade research and US Credit Strategist CreditSights With new issues including: Australian Stock Exchange: Control Bionic; Dalrymple Bay Infrastructure; Desert Metals; Live Verdure; You Foodz; Rincon Resources; Akora Resources; Errawara Resources; Cluey; Top Shelf International Holdings. Hong Kong Stock Exchange: Yue Kan Holdings; JD Health; Jiayuan Services; China Resources Mixc Lifestyle Services; HBM Holdings; Leading Holdings; Datang Group Holdings; Pop Mart International Group; Lion-OCBC Securities Hang Seng TECH ETF. London Stock Exchange Group: Abingdon Health TBC. Nasdaq: Ceratara; Hydrofarm Holdings; AirBNB; Oriental Culture Holdings. NYSE: DoorDash; PubMatic; C3.ai; Concord Acquisition Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

In a quiet week for IPOs in Europe, Dr. Sebastian Raedler, Head of European Equity Strategy at Bank of America Merrill Lynch asks whether investors can find any value left in the market; as growth has accelerated, he argues they need to ask which growth scenario is currently priced into the market to assess that potential. Barnaby Martin, head of European Credit Strategy at BofA Merrill Lynch says that with an expected €600 billion raised by corporates this year, companies may have gone too far. Supported by central bank activity many are now sitting on more than a year’s worth of earnings, and high yield is really the only market in which investors can find strong yields. Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

November 2020 saw a confluence of risk events. As a result buy-side and sell-side firms engaging in real risk-on activity. Not only was there the US election and the announcement of vaccine developments for COVID-19, but national developments, such as the UK’s consultation around the retail price index (RPI) which is used to calculate inflation increases for pensions and investments, directly affected markets. Ed Wicks, head of trading at Legal and General Investment Management, tells us how his traders delivered the best outcomes for their investors using FX algo trading, portfolio trading in credit and multi-asset package trading in rates, plus he outlines the real challenges faced in trading the index-linked Gilt markets over the last month.

The update on newly issued equities and bonds this week in the Americas this week, with Erin Lyons, Co-Head US investment grade research and US Credit Strategist CreditSights giving us a great rundown of the year-end market for bond issuers and bond investors With new issues including: Nasdaq: Ceratara; Hydrofarm Holdings; AirBNB; Oriental Culture Holdings. NYSE: DoorDash; PubMatic; C3.ai; Concord Acquisition Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Traditional dealers provide the the most valuable and consistent liquidity pool for fixed income trading, but non-dealer liquidity is growing in importance. Where buy-side traders need access to a wide range of trading counterparties, electronic trading platforms are able to deliver matching of trading flows through innovative new trading protocols. Chris Bruner, head of US Credit Product at Tradeweb, guides us through the choices traders can make to ensure the access to liquidity they have for trading corporate bonds is delivering best execution for their investors in all circumstances.

Bryan Richmond, head of business development for Chi-X Australia and Rehan Ahmed, Head of FI Products & Digital Assets at SGX, to discuss alternative ways for issuers to reach the market. Australian Stock Exchange: Aurumin, Hexima, Prospech, Cashrewards, Booktopia Group, East 33, Doctor Care Anywhere Group, MAAS Group Holdings and Nuix Hong Kong Stock Exchange: Evergrande Property Services Group Japan Exchange: Vario Secure Korea Exchange: ESR Kendall Sq REIT Co Ltd. Concerns about defaults by some state owned enterprises (SOEs) in China have been addressed somewhat. Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Issuers in Europe are concerned about the fees being charged to raise capital says Naresh Aggarwal, Associate Policy & Technical Director, at the Association of Corporate Treasurers (ACT), while James Deal, Chief Operating Officer at PrimaryBid outlines how retail investors can access primary markets more effectively. Uniliver businesses are being pulled together between London and Euronext Amsterdam after which the Company will become the single parent company of the Unilever group. London Stock Exchange Group: Helium One Global and N Brown Group still to launch expected on 23rd December. Nasdaq Nordic: Last week saw online bank Nordnet list with an €885 million IPO; Wiener Boerse: Last week had Aventa AG on 23rd and Biogena Group Invest AG on Friday 27th: Euronext: Alchimie listed on Friday 27th Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Bryan Richmond, head of business development for Chi-X Australia and Rehan Ahmed, Head of FI Products & Digital Assets at SGX, to discuss alternative ways for issuers to reach the market. Issuers in Europe are concerned about the fees being charged to raise capital says Naresh Aggarwal, Associate Policy & Technical Director, at the Association of Corporate Treasurers (ACT), while James Deal, Chief Operating Officer at PrimaryBid outlines how retail investors can access primary markets more effectively. Australian Stock Exchange: Aurumin, Hexima, Prospech, Cashrewards, Booktopia Group, East 33, Doctor Care Anywhere Group, MAAS Group Holdings and Nuix Hong Kong Stock Exchange: Evergrande Property Services Group Japan Exchange: Vario Secure Korea Exchange: ESR Kendall Sq REIT Co Ltd. Concerns about defaults by some state owned enterprises (SOEs) in China have been addressed somewhat. Uniliver businesses are being pulled together between London and Euronext Amsterdam after which the Company will become the single parent company of the Unilever group. London Stock Exchange Group: Helium One Global and N Brown Group still to launch expected on 23rd December. Nasdaq Nordic: Last week saw online bank Nordnet list with an €885 million IPO; Wiener Boerse: Last week had Aventa AG on 23rd and Biogena Group Invest AG on Friday 27th: Euronext: Alchimie listed on Friday 27th Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The full global update on newly issued equities and bonds this week, across Asia Pacific; Europe, Middle East and Africa; and the Americas with: Martina Garcia, Head of International Markets Strategy at London Stock Exchange Group Santiago Braje, CEO of Katana Bryn Jones, head of fixed income for Rathbones Tom Williams, Head of Energy and Infrastructure at Downing LLP Rob Waldner, Chief Strategist and Head of Macro Research for Invesco Fixed Income, Gina Kashinsky, Executive Director, Global Head of Equities, IHS Markit With new issues including: Australian Stock Exchange – HomeCo Daily Needs Real Estate Investment Trust (REIT), Plexure Group and WA Kaolin. Singapore Exchange – Credit Bureau Asia. Japan Exchange – Geo-code, MIT Holdings and Creema London Stock Exchange (AIM) – N Brown Group and Richland Resources. Wiener Boerse – Aventa AG Nasdaq – Ozon Holdings Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Martina Garcia, Head of International Markets Strategy at London Stock Exchange Group tells us how issuers in China can get access to investors in Europe via Shanghai-London Stock Connect, and Santiago Braje, CEO of Katana, picks out some of the latest relative value trades he has seen in APAC’s fixed income markets. New issues featured: Australian Stock Exchange – HomeCo Daily Needs Real Estate Investment Trust (REIT), Plexure Group and WA Kaolin; Singapore Exchange – Credit Bureau Asia; Japan Exchange – Geo-code, MIT Holdings and Creema Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Bryn Jones, head of fixed income for Rathbones, gives us an update on bond issuance in the region and opportunities it represents for investors, while Tom Williams, Head of Energy and Infrastructure at Downing LLP, tells us why the investment firms is coming to market with an IPO for it Renewables & Infrastructure Trust. New issues from: London Stock Exchange (AIM) – N Brown Group and Richland Resources. Wiener Boerse – Aventa AG Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

Rob Waldner, Chief Strategist and Head of Macro Research for Invesco Fixed Income, gives us an update on the drivers for investment in bond markets based on the US economy, while Gina Kashinsky, Executive Director, Global Head of Equities at IHS Markit lays out primary market activity in the US equities space. New issues this qweek: Nasdaq – Ozon Holdings Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The success of portfolio trading as a method for executing bond deals is leading to a doubling of volume every year at some investment houses, including Invesco. The ability to price a trade for many different bonds with crossover in the types of instruments – such as emerging markets and investment grade blue chip – and the direction of trades – with buying and selling possible in a single transaction, creates a new dynamic in liquidity provision. Ray Uy, global head of fixed income and currency trading at Invesco, says the growth of the protocol is akin to Moore’s Law, the observation made in the 1970s that computer processing power was doubling every two years. Portfolio trading is valuable in a range of market conditions, he says, outlining the reasons for its increasing use within the investment management community.

The full global update on newly issued equities and bonds this week, across Asia Pacific; Europe, Middle East and Africa; and the Americas with: John Fildes, lead for capital markets APAC, Bain Charles MacGregor, head of Asia at Lucror Analytics, a Smartkarma Insight Provider Adam Kostyál, Head of European Listing, Europe at Nasdaq Nordics Sean George chief investment officer, StrukturInvest Simon Maughan, Head of Trading Alpha, Liquidnet Paul Faust, Head of Strategy and Product Development, BondCliQ Australian Stock Exchange – Universal Store Holdings, Native Mineral Resources Holdings, Caspin Resources Limited, Metal Hawk Limited. Hong Kong Stock Exchange – Sichuan Tianzow Breeding Technology Co, Sunkwan Properties Group Limited, Jinke Smart Services Group, Yadong Group Holdings Limited and Shinsun Holdings. Tokyo Stock Exchange – arara. London Stock Exchange – Conduit, the Ecofin US Renewables Infrastructure Trust, Downing Renewables & Infrastructure Trust and VH Global Sustainable Energy Opportunities. AIM – Kistos. New York Stock Exchange – Aspire Real Estate Investors Nasdaq – Telos Corporation and Sotera Health Co Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The weekly update on newly issued equities and bonds this week across Asia Pacific with: John Fildes, lead for capital markets APAC, Bain Charles MacGregor, head of Asia at Lucror Analytics, a Smartkarma Insight Provider Australian Stock Exchange – Universal Store Holdings, Native Mineral Resources Holdings, Caspin Resources Limited, Metal Hawk Limited. Hong Kong Stock Exchange – Sichuan Tianzow Breeding Technology Co, Sunkwan Properties Group Limited, Jinke Smart Services Group, Yadong Group Holdings Limited and Shinsun Holdings. Tokyo Stock Exchange – arara. Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The update on EMEA’s newly issued equities and bonds this week with: Adam Kostyál, Head of Europe Listing at Nasdaq Nordics Sean George chief investment officer, StrukturInvest London Stock Exchange – Conduit, the Ecofin US Renewables Infrastructure Trust, Downing Renewables & Infrastructure Trust and VH Global Sustainable Energy Opportunities. AIM – Kistos. Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The full global update on newly issued equities and bonds this week, across Asia Pacific; Europe, Middle East and Africa; and the Americas with: Simon Maughan, Head of Trading Alpha, Liquidnet Paul Faust, Head of Strategy and Product Development, BondCliQ New York Stock Exchange – Aspire Real Estate Investors Nasdaq – Telos Corporation and Sotera Health Co Disclaimer: Primary Markets TV is a news update and intended for informational purposes only. Primary Markets TV does not provide investment advice or recommend investment products. Please consult a professional investment advisor when making investment decisions.

The demand for greater returns in the fixed income space has led investors to look at emerging market (EM) debt more closely. Interest rates in these markets typically offer better yield than in much of Europe or the US, but it can be more challenging for investment managers to access the right opportunities. Tannia Munroe, director, emerging markets product manager at Tradeweb, says that the volume of portfolio trading with EM line items has grown by 300% this year, while electronic trading of fixed income derivatives is also increasing, with over US$110 billion of volume in EM interest rate swaps in Q3 alone suggesting that many investors are using electronic trading to overcome barriers to access in emerging markets. The fragmented nature of fixed income liquidity married with a far wider set of brokers operating across the whole range of EM markets can add cost and complexity to trading in EM fixed income, suggesting that the increased efficiency that electronic trading is leading to an evolution of execution in this space.

Where access to FX liquidity for the buy side is contingent upon availability of credit supplied by the sell side. That can impact access to best price – and therefore best execution – due to the ties between counterparties, rather than a decision made on the trading desk. Peer-to-peer trading has been a success in the corporate bond and equity markets where it has enabled buy-side firms to transcend the limits of risk trading by dealers, or to find a better price than was possible through sell-side equity trading. Jay Moore, founder and CEO of FX HedgePool believes this all-to-all model applied across FX instruments in addition to the spot market will help asset managers find best execution for their investors.

Buy-side bond traders are finding greater autonomy in their access to liquidity through the diversity of counterparties available via electronic trading platforms. Quantifying price improvement in e-trading is challenging, but trading against the market allows greater certainty of execution, or even creates alpha opportunities. Finding liquidity and pricing is available from a more diverse range of sources than ever before is allowing them to continue trading in volatile conditions, and letting them seize opportunities when sell-side firms might step back from the market. Nicolas Masso and Graham Cox, global co-heads of UBS Bond Port, analyse that growth with an in-depth look at both quantitative and qualitative trends, including new market participants, the continuing expansion of sell-side participation trading and trading volume.

Onboarding the right broker can help a buy-side trading desk generate more effective execution very quickly says Joe Everitt, managing director at Stifel Electronic Trading at Stifel Europe. Getting access to a global network of dealers with electronic access available via an order or execution management system (O/EMS) can only take 48 hours in some cases, giving immediate benefits from the service. Everitt outlines the onboarding model to work with Stifel Europe, the gains that can be immediately realised and the level of support on offer – for example, with expertise in over 400 algorithm parameters – once onboarding has been achieved.

With the US election on 3 November 2020, one might expect America’s fixed income markets to be getting choppy. While equity markets show some heightened activity, a combination of Federal Reserve policy and deposit growth at banks is supporting liquidity in the market. Dwayne Middleton, global head of fixed income trading at T Rowe Price, outlines the market conditions for US bond traders today, and the optimal ways for buy-side traders to get best execution for their investors in the market today.

Being able to switch between passive and active trading algorithms is crucial to best execution in markets which can suddenly become volatile. However, as trading conditions change, so too can best execution parameters. For buy-side traders, having access to execution tools must be matched with the right transaction cost analysis (TCA) tools. Mark Barnes, director of electronic trading at Stifel Europe, outlines how actively trading in fast markets can be highly effective without losing efficiency when supported by a broker who can engage in advising on trading venues and new strategies.

Equity traders could not afford to be passive in the March sell-off, preferring to take control with direct market access (DMA) and dark trading both coming to the fore. With increased volatility likely later this year we explore the best approaches to trading equity markets in volatile and quieter periods with Tony Nash, managing director for electronic trading at Stifel Europe. Tony identifies nuanced and layered trading strategies, that allowed firms to ensure best execution while managing market risk, and ways to manage execution using on-the-fly transaction cost analysis (TCA). Importantly the approach to cost of trading needs to be factored in when assessing those analytics.

Trading is changing, with protocols such portfolio trading transforming the way some asset managers are executing orders. Traders need to adapt to new ways of working, which puts pressure on their order management system (OMS), the workhorse of the dealing desk. Buy-side desks must deliver more multi-asset trading, more digital communication and workflow, while taking advantage of new execution protocols. Yet while innovative OMSs can enable efficiency in trading, legacy tools can be bottlenecks if processes are compartmentalised. Brett Schechterman, global head of business for thinkFolio at IHS Markit, outlines the OMS innovations necessary to ensure traders can achieve best execution for clients over the next 18 months even in the most choppy markets.

Volatile markets are seen as the natural home for voice traders, but 2020 has seen many electronic trading protocols thrive. Fixed income is still a very relationship-based business, but having the right level of automation and analytics on the trading function can support greater use of e-trading to generate alpha and to support human traders, particularly when navigating the opportunities provided by volatility. Mikael Björkman, head of Execution for Fixed Income at Credit Suisse, analyses how to optimise the use of electronic trading on the buy-side desk, how to integrate high- and low-touch trading and the feedback that e-trading provides into performance measures.

NEW Trader TV: Carl James of Pictet Asset Management analyses corporate bond trading activity in September. He asserts that the illiquidity concerns which some buy-side firms are reporting in the market are really an issue of engagement. By nurturing relationships, applying analytics to sell-side support and using alternative trading protocols, buy-side traders can develop strategies to get better dealer liquidity over the long and short term. Data from MarketAxess.

Triaging between bonds by liquidity profile can be more easily achieved using machine-learning algorithms. The level of automation this provides to the sell-side desk dramatically increases responsiveness to request-for-quote orders, while buy-side desks can reduce workload allowing traders to focus on more complex trades. Vuk Magdalenic, CEO of Overbond, explains how his firm is offering these tools via cloud-based visualisation, API integration and integration on the Refinitiv Eikon terminal to support execution via Tradeweb.

The sell-side trading function is under considerable pressure to change, and as it does it will impact the investment banking business, its investment manager clients and technology vendors. The commercial success that banks saw from trading in volatile markets this year should not mask the longer-term trends of increased automation, lower headcount, and a more data-driven client base. To get a considered perspective on the evolution of sell-side trading, we spoke with Mark Goodman, head of platform and execution hub at UBS; Ed Wicks, head of trading at Legal and General Investment Management, and Pontus Eriksson, head of strategy at FIS to understand the drivers for change, their visions of the future dealer, and the practical steps needed to help the sell-side move forward. Sponsored by FIS, market data supplied by MTS.

This year’s FIX EMEA Trading conference was held virtually for the first time, and showcased a range of discussions. From the drive towards environmental, social and governance (ESG) finance amongst regulators and investors alike, the impact of COVID-19 on the regulatory agenda, to updates from heads of trading across the globe, clear themes were visible. Rebecca Healey and Matt Coupe, co-chairs of the EMEA Regional Committee, tell us why the need for a community in finance has never been greater, and how the FIX Community can support firms in moving through the difficult conditions afflicting markets this year.

Portfolio trading took off in popularity at the height of this year’s volatile markets. Chioma Okoye, director and European credit product manager at Tradeweb, says that trading protocol has become increasingly used by asset managers from the largest to the smallest firms, with greater numbers of line items being used, and traders moving from manual spreadsheet models to electronic trading for improved efficiency. Since trading US$49 billion in 2019, Tradeweb has seen volumes explode with US$79 billion of portfolio trades executed in the first eight months of the year. Chioma explains how and why appetite and capability has increased.

Matt Coupe, Co-Chair of the EMEA Regional Committee in the FIX Trading Community outlines the regulatory changes that are hitting capital markets firms today, from the many consultations led by the European Securities and Markets Authority (ESMA), to the responses that firms need to consider as their business environment changes. This year’s agenda at the virtual FIX EMEA Trading conference on 18 September 2020, includes: Philippe Guillot, Managing Director, Markets Directorate, Autorité des marchés financiers (AMF) Stephen Hanks, Markets Policy, FCA Tilman Lueder, Head of Securities Markets, EU Commission Paul Tang, MEP Greg Yanco, Executive Director, Markets, Australian Securities & Investments Commission (ASIC) Details of the event can be found here: FIX EMEA Trading Conference – Going Virtual, Going Global

Credit markets in August have characterised by high levels of issuance and poor levels of secondary market liquidity. Digesting enormous new flows, with the Federal Reserve buying very little and de-risking in the markets is all having a massive impact. With expectations on new issues blown through already, September is looking ominous. With such huge supply, it will be critical that new initiatives to automate primary market processes are in play as soon as possible, says Jim Switzer, global head of fixed income trading at Alliance Bernstein. At the same time, asset managers that are unable to trade efficiently and electronically in the secondary markets will struggle in this environment

Electronic trading in the rates space has been growing across the US and Europe, but has declined over summer in US Treasuries. Ken Monahan, vice president for Market Structure and Technology at analyst firm Greenwich Associates, gives us an insight into what is driving the proportional increase in dealer-to-client (D2C) electronic trading in 2020, in contrast to the overall trend, and an understanding of the importance of futures trading as a counterpart to the cash bonds market.

Industry participation with the FIX Protocol group supports capital markets firms, their investors and asset owners, by creating efficiency of communication and integration between different market participants. New faces need be brought into the FIX family, and the FIX Next Gen initiative is helping to bring fresh ideas and skills into the fold. Sapna Swaly of Vela, Sakeena Lalljee of Aquis Exchange and Alex Ings of Credit Suisse explain the value that value that new contributors can get from attending the virtual FIX EMEA Trading conference on 18 September 2020, including key agenda items and benefits to employers.

Regulatory initiatives to enhance transparency in the bond markets have merit, but also have limits, says Jason Waight, head of Regulatory Affairs for Europe at MarketAxess. While these utility models increase the information available, Europe’s existing initiatives have added very little to the price formation process, making it vital that traders understand how else they can get access to data. Transparency is available today through commercially available tools and those investment firms engaging with these solutions today can support themselves in choppy markets by being price makers as well as price takers, putting them on the front foot.

The European Union’s €750 billion rescue package is having a massive impact on rates markets, with peripheral European country debt looking more attractive. Concessions in the primary rates markets, as a result of the debt issuance that governments are using to support their economies in the face of COVID-19, are also creating investment opportunities.Liquidity is very challenged in the secondary market, but that requires investors to be smarter about how they interact with it, says Andrew Mulliner, head of global aggregate strategies at Janus Henderson. Buy-side trading desks and sell-side dealers have proven that investments in electronic trading have paid off, while investment firms with strong trading desks are reaping the rewards through enhanced access to the market.

In 2020 head traders are prioritising the tools that their traders have and the skills needed to use them, in order to broaden their execution choices. From portfolio trading to auto-execution, these protocols are enabling better execution in a wider degree of market conditions. More choice requires better decision-making, and so a new trading protocol has to be integrated into their workflow and fully understood to minimise the impact of decision-making on their most precious resource, time. By delivering best execution to their end clients, buy-side trading desks are reducing investment costs and boosting alpha generation. Iseult Conlin, US Institutional credit product manager at Tradeweb, says that trading desks can and should be engaging with these new tools right now.

Calmer markets should lead to better transparency however, streaming dealer prices in the corporate bond market today do not reflect traded prices as accurately as the buy side would like. In March markets became dysfunctional and despite encouragement from banks towards direct, bilateral trading the sell-side proved cautious in trading on risk when faced with such volatility. In July, post-crisis, buy-side traders still see spreads, liquidity and transparency in the European corporate bond market as weaker than in February, notably in the Sterling investment grade market. Sharon Ruffles, head of fixed income trading at State Street Global Advisors, says that initiatives like the proposed European consolidated tape would improve, but not solve, the transparency challenge. Her firm is using new trading protocols such as portfolio trading along with traditional voice trading and depth of experience to support investors in these challenging markets.

In the low rate environment with rate volatility ‘dying on the vine’ curve finding investment opportunities is very challenging in the government bond space, as spread trades become very directional bets on yields rising or falling. Competition in primary and secondary markets is also fierce and that creates challenges for portfolio managers and investment traders as they seek to access new issuance or liquidity opportunities. James Athey, investment director at Aberdeen Standard, gives us his insights into accessing returns as rates volatility is ‘dying on the vine’, from using interest rate swaps to building closer dealer relationships.

With the extreme market volatility in March and subsequent responses at a central bank and regulatory level, working out where best to trade equities has been challenging for buy-side traders. Lit and dark venues not only provide different advantages, but as short-term structural changes – such as short-selling bans – were imposed, some trading strategies which favour certain venues would have died off, impacting the availability of liquidity. Anish Puaar, European Market Structure Analyst at Rosenblatt Securities gave us his expert insights into equity trading in the first half of the year, and the potential dynamics which will affect it going forwards.

Countermeasures to tackle COVID 19 and the pandemic itself are changing our view of risk at a macro, firm-wide and trading desk level. It has already been a major cause of market volatility, testing the capacity of market makers, investors and market infrastructure to handle extreme price moves and volume. The longer term effects are likely to challenge existing business structures, best practice expectations and trading models. Already outsourcing and software-as-a-service are seeing increased interest in the front office. In this webinar we discuss how trading may evolve as an outcome of the pandemic and its effects, with guest speakers Gary Paulin, Global Head of Integrated Trading Solutions at Northern Trust Capital Markets, Brett Chappell, Partner at Sherpa Edge and Pontus Eriksson, Strategy Director for Capital Markets, FIS.

Consistent execution quality, reduced bias and greater resources to handle complex trades are all advantages that KBC Asset Management has seen from its automation of government bond trading. The next step will be to use machine learning to assess counterparties across fixed income instruments. Increasing the automation of bond trading has clear advantages for an asset manager’s investors, but buy-side firms need to assess whether to buy or build tools, and how the role of traders will change as a result. Joeri Wouters, senior fixed income trader at KBC AM and Charlie Campbell-Johnston, managing director for AiEX and workflow solutions at Tradeweb discuss the lessons they have learned from their work together, including fully automated rates trading, supporting enhanced trade automation through partnership and the integration of AI into the trading workflow.

Remote working is breaking up the physical communication and workflows that buy-side traders and portfolio managers use in the office. To minimise any impact on investors, and to optimise performance, they will need to embrace cloud-based investment and trading systems across the front office. Russell Feldman COO at IMTC gave his expert view on the importance of real-time, collaborative tools in the supporting the trading workflow for investment firms. About IMTC IMTC strives to be the most compelling investment management technology platform of the 21st century. The business offers cloud-native software, enabling fixed income professionals to save time and focus on high value work. IMTC’s NOVA platform provides buy-side firms with data, analytics and portfolio management solutions spanning the entire investment life cycle—from idea generation to trade allocation and everything in between. NOVA streamlines front-, middle- and back-office functions including portfolio construction, risk management, performance evaluation, compliance monitoring and reporting. IMTC’s global team includes 80+ full-stack engineers who continuously deploy unparalleled enterprise software solutions, servicing investment professionals across the financial spectrum.

The levels of volatility in markets are making it harder to price the underlying instruments in any fund. The buy-side trading desk is fundamental to supporting price formation and liquidity access. Optimally, it will allow the investor to sell/redeem a fund with minimal dislocation from the underlying instruments. Trader TV spoke to Deborah Fuhr, managing partner and co-founder of analyst firm ETFGI, about the effect that the liquidity crisis is having upon active and passive funds.

The liquidity crisis in March 2020, brought on by a combination of coronavirus, oil trade wars and the central bank responses, has left traders reporting one-sided markets in major securities. This puts buy-side desks under massive performance pressure. If assets cannot be bought or sold, the investment strategies set out by portfolio managers cannot be put into effect. Trading desks that have invested in technology and are structured on trading by liquidity profile instead of asset class, can give asset managers the efficiency needed to trade high volumes at high speed wherever possible, says Gianluca Minieri, deputy global head of trading at Amundi Asset Management (€1.4 trillion AUM). He reflects on what this crisis can tell us about trading operations today, and the potential changes asset managers may need to make in order to come through it.

Leading asset managers are building low-touch, multi-asset trading desks to deliver automation wherever possible. Building automation into the trading process requires the asset manager to define best practices around volume, asset class and timeliness of liquidity, then building appropriate rules into the execution process. John Adam, global director, Portfolio Management & Trading Solutions at FactSet, says trying a one-size-fits-all approach results in one-size-fits-none outcome. Instead, specific expertise in asset class trading is needed to ensure that the right parameters around execution quality are built into the execution management system, to deliver efficiency with no loss of quality.

New research by Greenwich Associates in partnership with Refinitiv (read the report here: https://refini.tv/37biTXb) found that traders see data analysis as a core skill to the trading desk, more than market structure, within three to five years. In part this will include data scientists and quants support the trading team, but when will we reach the tipping point at which humans are optimising trading machines more than machines are optimising trading humans. Doug Munn, head of real-time data at Refinitiv, says that humans will be making the key decisions as to how and where technology will be applied within trading. To drive automation in trading, firms will need to have confidence in their primary sources of data, their capacity to use alternative data and the skills of their partners and team to deliver timely and reliable decisions.

The ‘nuisance’ trades that asset managers have to handle in foreign exchange create a complex web of orders for long-only firms. Advancing their FX trading capabilities in order to improve the timing and costs of trading through automation can create real efficiencies. However, bringing automation into the workflow requires trust, particularly when the machine may be replacing a set of relationships and established trading methods. Chris Matsko, head of FX trading services at FactSet, outlines how real-money managers can build automation into the trading desk to take advantage of new liquidity sources and more effective ways of working an order.

The timing of foreign exchange trades, their market impact and explicit costs must all be considered by asset managers’ trading teams, as they try to optimise investor returns. While banks are reducing their risk appetite, they are showing clients greater transparency on executable prices on-screen, clearing the risk rather than warehousing it. In a low volatility market, with tight spreads, this level of efficiency is entirely necessary in order to deliver liquidity at a decent price. Increasingly automation can be brought into the buy-side workflow to optimise its use of this liquidity, says David Scilly, head of fixed income and currency dealing at First State Investments, but traders must be aware of the liquidity they are interacting with, and the post-trade analytics they use to assess execution quality.

If data is mismanaged on the trading desk, it can trigger individual trading errors or even flash crashes. Jon Williams, head of fixed income at Refinitiv, identifies key stages of risk management for data including getting the right amount of information; assessing whether it will be consumed by human or machine, and how it is cross-referenced against the benchmark for the investment idea.

Total transparency might intimidate some traders, but honesty creates better performance, says Paul Squires, head of trading EMEA equities and Henley fixed interest at Invesco. Data analytics is a crucial skill for tomorrow’s traders, and increasingly importance in building confidence amongst investors, portfolio managers and the trading team itself, where applied correctly and in context. Yet best execution cannot be achieved simply by following a set of instructions; the expertise that traders bring to the market is being enhanced, but not replaced, by quantifiable performance measurement and automation.

If balance sheet restraints prevent banks from providing repo liquidity, but asset managers are labelled ‘shadow bankers’ for peer-to-peer repo – what do regulators want? Roelof van der Struik, manager for Treasury Trading & Commodities at pension fund manager, PGGM sees a backstop to accessing central bank liquidity as one option. Andy Hill, senior director at the International Capital Market Association (ICMA) says that members’ proposals may not be acceptable – disintermediation will not work but they are hamstrung by their regulatory obligations to retain capital against their trading activity. He argues there is a case for recalibrating some of these obligations, notable the leverage ratio as part of the Basel III Capital rules.

The repo markets are a marked cause for concern amongst market participants, regulators and central banks today. They offer a route for generating returns on assets, sourcing collateral and providing short-term liquidity, however, recent disruptions have raised the levels of concern around liquidity shortfalls and price spikes, creating a structural challenge for market participants on the buy- and sell-side. Oliver Clark, global head of product at MTS and Tim Martins, product manager for repo and money markets at MTS, see electronic trade execution as a route to a marked improvement in price and liquidity discovery, but they warn that buy-side firms should adopt these new trading protocols ahead of the next event to avoid unnecessary risk.

How can traders manage risk and opportunity during a market event? While portfolio managers will take positions prior to the event itself, traders may either seek opportunities – such as misalignments in pricing – or manage risks that are created, for example if the market moves in an unexpected direction. Trading across asset classes can uncover opportunities, but having access to the right data at the right time is key. James Athey of Aberdeen Standard Investments, Sean George of Strukturinvest Fondkommission and Mattias Remnefjord of FIS discuss the risks and possibilities that traders can uncover in part 2 of this episode.

Following a rate decision by a central bank, or an election, the process that investment managers took to approaching the event and then engaging with it need careful scrutiny in order to optimise both trading and portfolio decision making in the future. James Athey of Aberdeen Standard Investments, Sean George of Strukturinvest Fondkommission and Mattias Remnefjord of FIS give tips on how to capture, analyse and use data post-event. Supported by FIS.

When an interest rate decision looms, portfolio managers (PMs), traders and dealers build a matrix of possible outcomes, decide their expectation and work out how to maximise their upside, while minimising their downside. That hinges upon an understanding of the market’s view, and its likely reaction to an outcome, to understand the risks inherent to any trade. Sell-side research and market intelligence can be fundamental to investors in setting up these preparations. If the outcome is unexpected, that also needs to be handled. James Athey, senior portfolio manager at Aberdeen Standard, Sean George, CIO at Strukturinvest Fondcommission, and Mattias Remnefjord, product manager for fixed income at FIS, outline the scenarios for long-only and alternative investment managers, and their investment bank counterparts.

In light of ongoing uncertainty around interest rate decisions, elections and economic data outputs, we held a live discussion about the buy- and sell-side firms trade around market events. Joining us were Sean George, chief investment officer at Strukturinvest, James Athey senior portfolio manager at Aberdeen Standard, and Mattias Remnefjord, Product Manager for Fixed Income from FIS. In this three-part show we discussed pre-event planning; trading through an event; and post-event analysis. This is all three parts, in sequence, for you to enjoy.

By bringing together the dealer-to-dealer repurchase agreement (repo) market with dealer-to-client market, asset managers can gain real advantages from trade clearing to straight-through-processing. Electronification of the market will continue to increase, says Oliver Clark, head of product at MTS and Tim Martins, head of product for repo and money markets at MTS, which will continue to create new efficiencies for investment firms, spurred on by regulation such as the Securities Finance Transaction Regulation (SFTR).

Asset managers need to overcome operational inefficiency in primary markets today. We spoke with Doriane Geyler-Rojas and Abdoulaye Ba of Natixis Asset Management Finance to learn how they are trying to overcome these hurdles, through a better use of data, access to platforms and potentially through regulatory change.

An increased reliance on the primary market is impacting trading desks’ efficiency in secondary trading. Frustration with the issue is leading asset managers to look for a reform of existing processes. In this interview, Oscar Kenessey, head of fixed income, derivatives and currency trading at NNIP, and Eric Heleine, head of the trading desk at Groupama Asset Management, make the case for several lines of reform. These include greater sell-side support for platforms, more structured issuance of bonds, and increased responsibility for banks to make markets in bonds for which they manage issuance. Part of the Fixed Income Leaders Summit in Barcelona, managed by WBR.

When over-the-counter markets are suffering from a limited liquidity supply, buy-side firms can struggle with price formation and counterparty selection. Those trading desks can be far more manoeuvrable if they are able to trade exchange-traded instruments such as futures, exchange-traded funds (ETFs) and options on ETFs. Lee Bartholomew, head of derivatives product R&D in fixed income at Eurex, outlines the strategies and skills that traders should consider when assessing instrument selection.

Trading performance analysis across assets will create welcome feedback for the trading team says Cathy Gibson, head of trading at Royal London Asset Management, but there are significant complexities in providing a meaningful picture for an asset manager. Appropriate performance benchmarks are very different, data availability is inconsistent and the technology used has to be flexible enough to account for these variations. Consequently the value of multi-asset analytics will depend upon the sophistication it can manage while providing a straightforward picture for all stakeholders.

Transaction cost analysis (TCA) can have very positive effects on everything from trading to the investment process, if it is implemented well. However, while equity TCA is relatively mature, there are serious challenges in other asset classes, which require traders to track down robust data sources and conduct rigorous appraisals of the metrics to be used in order to extract the greatest value from those services. Kevin O’Connor, head of analytics and workflow solutions at Virtu Financial, outlines the benefits and best practices that buy-side firms can achieve when their traders use TCA effectively, and offers his insights into the key hurdles that need to be overcome.

By increasing the level of automation that traders and portfolio managers can access in primary markets, asset managers can increase engagement and access to allocations. This requires careful alignment of systems, counterparts and data flows. In this video, the third in a three-part series with Herb Werth, managing director at IHS Markit, we discuss how his firm supports a range of integration models in order to support traders in managing this process.

Trader TV: New trading protocols like streaming prices can boost bond trading execution, but buy-side traders must determine when is best to use them. Across the range of fixed income instruments and markets different ways to trade can create optimal execution based upon the portfolio manager’s investment goals. Chris Bruner, head of US credit at Tradeweb, talks through the decisions that traders make to select the right protocol for the job.