LONDON Oct 12 Bond trading volume in Europe has
declined by 1.5 trillion euros ($1.68 trillion) this year as
the fallout from tighter regulation and record low interest
rates take their toll on fixed income markets, figures published
on Wednesday showed.
Bonds worth 20.4 trillion euros changed hands in the first
nine months of the year, down from 21.9 trillion euros in the
first nine months of last year, according to Trax, a subsidiary
The fall of 6.8 percent was concentrated mostly in the first
half of the year, as volume only fell 1.1 percent in the third
quarter to 6.52 trillion euros from 6.59 trillion euros.
Third quarter data also show that the number of trades
actually rose 4.6 percent from a year earlier to 1.82 million
from 1.74 million.
The third quarter figures probably were boosted by Britain's
decision in June to leave the European Union. Trax figures this
week showed that UK government bond trading has soared as
investors try to chart a path through the uncertain outlook for
UK growth, inflation and interest rates.
In general, however, tighter financial regulation, banks
scaling back their market-making capabilities and a plunge in
global bond yields to their lowest ever levels have all helped
reduce trading volume this year.
At one stage earlier this year, as much as $13 trillion of
bonds around the world had a negative yield.
The number of actual trades in the first nine months of the
year fell 4.5 percent to 5.79 million from 6.06 million last
year, Trax said.
Around 80 percent of activity was in sovereign and
government debt, just over 7 percent in emerging market debt and
5 percent in high grade corporate paper, the Trax figures
Trax provides post-trade services for around two-thirds of
all fixed income transactions in Europe.
($1 = 0.8928 euros)
(Reporting by Jamie McGeever; Editing by Jeremy Gaunt)