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Fixed income trading without the noise

Alexandre Hardouin
Alexandre Hardouin
Director, Fixed Income Desktop, London Stock Exchange Group
Douglas Munn
Douglas Munn
Head of Enterprise Real-Time Feed Propositions, Refinitiv

Fixed income trading is witnessing an explosion of market data, making it harder than ever to separate the true trade signals from the clutter. How is Refinitiv helping bond market traders to create more flexible and agile workflows in order to improve their productivity and growth?

  1. Fixed income traders need more data than ever to power smarter trading engines, find a competitive advantage and meet their reporting obligations.
  2. Refinitiv Eikon brings together different trading venues, price discovery data and historical trades, and integrates this into fixed income trading workflows.
  3. By partnering with MarketAxess and Tradeweb, Refinitiv is able to deliver new levels of bond market information and transparency to all aspects of the trade lifecycle.

With the growth of digital trading, investors and traders have more tools and information than ever at their fingertips. Combined with an increased focus on regulation compliance and price transparency, the process of sorting through it all to make the right investment decisions has become quite complex.

The dramatic shifts in fixed income markets are forcing investors to adapt to a new market paradigm — one with new market participants and new trading technologies, offering alternative means to trade bonds.

Gone are the days of bilateral bond trading, where a couple of phone calls were all you needed to get a price quote. Transparency wasn’t exactly a given, and prices could align more with a broker’s whims and personal relations than with what was available elsewhere in the market. That could leave you in doubt about the real transaction cost.

However, the digital age has brought bond trading out of the shadows. Similar to the equities market structure, fixed income is witnessing an explosion of market data that is widely available because of new technology and the rise in electronic trading.

Price transparency. The new norm in fixed income trading

And thanks to MiFID II, price discovery is more transparent than ever. Instead of only indicative bids, you get true bids, or live prices, as well as post-trade prices, so you are better able to evaluate and execute a trade.

Pre-trade analytics and price discovery

The challenge is that there are millions of instruments available and almost as many unique bonds in databases. Refinitiv alone covers 3.2 million live instruments globally. Not only do you have to search and filter for what you need, but you also need the data to be reliable and consumable.

The tendency for many is to engage a number of vendors to first sort through the raw data and then to calculate analytics. But this can be equally time-consuming, costly and perhaps even outdated.

Douglas Munn quote

In this new era, how you get the information is just as important as how you consume it, making more flexible and agile fixed income trading workflows a necessity.

As previously mentioned, merely having the data is not enough. When conducting back-end testing, analytics are needed to see where trading opportunities are headed. Traders need to rely on both historical and reference data to build their trading engine and determine how the market will respond in certain situations.

In addition to this look-back component, traders also need an execution component that will use these analytics to get real-time price feeds and identify potential trading strategies. Automation, artificial intelligence and machine learning provide both, while also reducing computing costs and resources.

Market-leading data and services

Tapping into leading fixed income market data and services, Refinitiv has partnered with the market leaders in fixed income data and services, such as MarketAxess and Tradeweb amongst others, to deliver new levels of bond market information and transparency to all aspects of the trade lifecycle — from price discovery to transaction cost analysis.

Refinitiv is the sole distributor of Axess All and Composite+ content from MarketAxess, the leading e-trading platform for corporate bonds; as well as exclusive market data from TradeWeb, the world’s leading online trading marketplace for fixed income securities.

Eikon, Refinitiv’s open technology platform for financial data and analysis, brings together different bond price data, historical trades, pre trade tools and Excel functions to help traders efficiently integrate bond trade data into fixed income trading workflows.

These are delivered via desktop as well as real-time feeds, giving you the most comprehensive, aggregated views on trade activity. In essence, it’s an exclusive, trusted source for all your data needs, including the actionable insights needed to stay ahead in the market.

What are you feeding your analytic engine?Future trends in fixed income trading

In today’s digital markets, best execution means fixed income traders need more data than ever to power smarter trading engines, find a competitive advantage and meet their reporting obligations.

Our trading apps offer free and easy access to market news, price quotes, and real-time streaming charts using a wide range of pre-trade tools — all delivered through an innovative desktop and mobile app.

They also allow traders to set price or trendline alerts. This AI and machine-learning API structure makes it easy for you to consume historical and time series data to identify new opportunities.

There are two types of users for our solutions: the human users that look and analyze data on a screen, and machine users, which process real-time data we collect from millions of financial instruments and terabytes of historical and reference data. Together, we’re helping to increase access to data and reducing the costs of computing. Tasks previously done by humans are now performed by machines, giving traders more flexibility and trading power.

To see further, know earlier, and act quicker, Eikon integrations, specifically, provide:

  • Visibility: You can sharpen your fixed income price discovery with a wide range of exclusive, pre-trade tools, including Reuters and IFR news, Tradeweb, MarketAxess, post-trade MiFID II bond data from all major venues, Markit, and Refinitiv CDS intraday and end-of-day data, as well as Starmine CDS data and LPC loan information — all available on a single reference point.
  • Search and filter capabilities: By applying a variety of filters, including bond, type, sector, ratings, historical data, new issue alerts, and many more, you can find exactly what you need, when you need it. There are also applications for comparing bonds and ratings, helping you to monitor trends and act with speed and intelligence.
  • Accessibility: It’s easy to get what you need with access to the prices of bonds and swaps from a variety of sources, including traded prices and pre-trade MiFID II prices alongside existing pricing sources which cover partner trading platforms, such as MarketAxess and Tradeweb, banks (including dealer runs), exchanges and the Refinitiv pricing service.
  • User-friendly features: With intuitive, natural-language search capabilities, all you have to do is type it, find it and you’re ready for business — no need to hunt for information.

Refinitiv has been serving and tracking the trends in the fixed income market for decades and we continue to add new features and capabilities to help traders optimize their workflows and improve their productivity and growth.

The bottom line is that fixed income markets are opening up and providing greater transparency. Better transparency means more sophisticated knowledge of the market, including better pricing, so you can trade smarter and more effectively manage risk and exposure.

Now that our solutions take care of heavy lifting — separating the true trade signals from the clutter — are you ready for the future of fixed income trading?

Contact a Refinitiv fixed income specialist today