MarketAxess CEO McVey on the Bond Trading Landscape

The video discusses the growth of electronic trading in bond markets, highlighting the shift towards all-to-all trading protocols and the challenges posed by market fragmentation. It examines the impact of regulatory reforms on banks and their trading strategies, as well as the introduction of new liquidity and global market expansion. The video also analyzes trade sizes and market fragmentation, emphasizing the increasing comfort of investors with larger trade sizes.

What has been a significant change in the bond market due to electronic trading?

• Reduction in market liquidity

• Decrease in trading volume

• Increase in manual trading

• Shift towards all-to-all trading

How have regulatory reforms affected banks' roles in the bond market?

• Banks are less involved in intermediation

• Banks have increased market share

• Banks face higher capital requirements

• Banks can hold more risk

What was a key finding from the bond market during a risk-off environment?

• All-to-all trading decreased

• High yield spreads narrowed

• Liquidity became more crucial

• Transaction costs increased

What is a future expectation for the bond trading platform?

• Limitation to local dealers

• Decrease in global connections

• Inclusion of Chinese government bonds

• Reduction in trade sizes

What trend is observed in trade sizes on the platform?

• Decrease in average trade size

• Majority of trades are below $500,000

• Increase in block trades

• Investors prefer smaller trades