Electronic Trading in European Fixed Income Markets

by Axel Pierron, October 6, 2004

Abstract

Paris, France October 6, 2004


In a new report, " ," Celent examines the European fixed income markets, providing detailed informations on the inter-dealer markets and dealer to client markets in both government bonds and non-sovereign bonds. Major players in the industry (MTS, eSpeed, BrokerTec, Tradeweb, Bondvision, etc) are analyze through case studies in this report.

According to Axel Pierron, Celent Analyst and author of the report, "There are two major facts in the european fixed income markets: first most trade occurs on the sovereign bond market (the average daily trade volume for government bonds is more than _ 83 billion, versus _ 30.8 billion for the non-government bond markets). Secondly, the market is dominated by inter-dealer trading, which represents more than 65 percent of the government bond market and over 70 percent of the non-sovereign fixed income market.

Despite a real interest from market participants for electronic trading and a global growth of the amount outstanding in European fixed income markets, the lack of uniformity among these markets (primary markets, regulations) complicate automation. Banks’ domination as market participants and the lack of a pan-European clearing and settlement house are also huge handicaps. "In Europe, market participants that want to operate in different countries need to establish subsidiaries in each country, as there is no pan-European clearing and settlement institution. Euroclear and Clearstream were developed to fill this need, but national legislation makes it difficult to operate on a pan-European basis. This reinforces the fragmentation of the European fixed income market, a juxtaposition of 15 smaller markets" add Axel Pierron.

The report goes on to provide a clear understanding of the different markets with marketshare of participants, trading habits, technology, etc.

The 48-pages report contains 31 figures and 9 tables.

A Table of Contents

is available online.


Fixed income electronic trading will be discussed at an upcoming roundtable hosted by Celent on December 9, 2004 at the Crowne Plaza London - The City. Scheduled panelists include representatives from, Deutsche Bank, Dresdner Kleinwort Wasserstein, Merrill Lynch and TradeWeb. Click here for additional information on this event.


of Celent Communications' Retail Securities & Investments, and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

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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].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Paris, France October 6, 2004

Electronic Trading in European  Fixed Income Markets

Return to report Abstract

 

EXECUTIVE SUMMARY 3
MARKET OVERVIEW 5
GOVERNMENT BOND MARKET 11
  Inter-Dealer Market 13
  Dealer-to-Client Market 14
NON-SOVEREIGN BOND MARKET 16
  Inter-Dealer Market 18
  Dealer-to-Client Market 19
ELECTRONIC TRADING PLATFORMS 22
  Dealer-to-Client Platforms 24
  Inter-Dealer Platforms 31
CONCLUSIONS 44
OBJECTIVITY & METHODOLOGY 45

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