2015 European Fixed Income Market Sizing: The Short and Winding Road to MiFID II

by Joséphine de Chazournes, September 28, 2015
Industry Trends


Celent estimates that the European cash fixed income secondary trading activity has tightened, by 2.3% between 2014 and 2015, and that market conditions have changed in a staggering way since last year.

The interdealer-broker (IDB) government bond market is still dominated by MTS and BrokerTec. The dealer-to-client (D2C) government bond market is still dominated by Tradeweb and Bloomberg. The D2C nongovernment business has grown dramatically and has seen a slight increase in electronification, but also some additional voice business thanks to sales technology. The IDB nongovernment market is flat year on year, but with big market share swings. EMEA emerging economies are still attractive for D2C electronic platforms.

“In 2015 the buy and sell side alike are still heavily focused on solving the liquidity issue the nongovernment bond market is facing, and some venues are picking up market share through creative protocols,” says Joséphine de Chazournes, a senior analyst with Celent’s Securities & Investments practice and author of the report. “Interestingly some tier 2 and tier 3 banks have continued to grasp market share with their recently built global electronic capabilities, as large buy side clients now allocate their flows to a much greater number of sell side firms.”

This report provides an update of the Celent report 2014 European Fixed Income Market Sizing: Electronic Strikes Back. It gives an overview of the market and its dynamics and provides estimates for the average daily volumes (ADV) traded in the government bonds and nongovernment markets. Celent outlines the evolution of these markets, looking in particular at their share of electronic trading, both in the interdealer-broker and in the dealer-to-client segments. Finally, the report looks specifically at the competitive landscape of the various trading platforms that are used to execute these trades.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary



Key Research Questions




European Fixed Income Market Structure Trends


The Government Bond Market



The Interdealer Market



The Dealer-to-Client Market


The Nongovernment Bond Market



The Interdealer Market



The Dealer-to-Client Market




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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