Currency trading volumes on Thomson Reuters' platforms hit a record high in February and fixed-income venues have reported a surge in activity as a resurgence in volatility and new regulations push investors to trade electronically. Thomson Reuters said on Tuesday average daily volumes of FX products in February rose to $463 billion, 37 percent higher than a year earlier, and up from January, which was also a record month.
A sudden sell-off in stock markets in late January and the ramifications of an end to record central bank stimulus have rattled investors and caused trading to accelerate across asset classes. Volatility in FX and bond markets have risen, albeit from historically low levels.
In the bond market, a new European Union financial markets directive known as MiFID II came into force at the start of this year, encouraging more investors to shift onto electronic trading venues. Bond investors have generally executed trades over the phone and many have resisted the move to electronic platforms until recently.
TradeWeb, one of the world's biggest bond platforms and majority-owned by Thomson Reuters, said European-based clients had traded 73 percent more European corporate and financial bonds - products affected by the new rules - in February versus a year earlier. Another bond platform, MarketAxess, saw volumes for the first two months of this year rise to $301 billion, up from $238 billion last year. Kevin McPherson, global head of sales at MarketAxess, said Mifid II was "among the drivers of the high level of electronic trading".
Global fixed-income markets were showing "signs of returning to more normal levels of volatility," he said. Average daily trading volumes of currencies at Thomson Reuters topped $463 billion in February, up $338 billion a year earlier. The company said average daily volumes on its platforms have totalled $407 billion on a long-term basis.
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