Mostly… fixed income and cross product eTrading

September 18, 2006

What Shockwaves Will Result from Tradeweb Credit Launch?

Filed under: etrading — holky @ 2:38 pm

The Tradeweb Europe credit bonds segment places them directly head to head with Marketaxess Europe. But the shockwaves are likely to be felt much wider than just in those two platforms.

While we do hear some customers saying they plan to use Tradeweb instead of Marketaxess exclusively within the foreseeable future, I have yet to hear of any customers saying their strategic choice is to keep Marketaxess for their credit bond trading.

This could be partly because Tradeweb, with the advantage and also challenge of being last to market, have got more bells and whistles appealing to the market participants (buy+sellside) in their credit segment. But I suspect it’s mostly because Tradeweb are building on their hearts-and-minds strengths in Euro Govvies within the institutional customer base, many of whom are the same customers who’ve been using Marketaxess for credit. Tradeweb now offer a single and trusted application for govvy and credit bond trading, so why would you choose to run and support disparate and unintegrated apps – unless doing so gives you access to liquidity you can’t get elsewhere?

If that’s the case, then the tipping point into Tradeweb Credit is the availability of liquidity equivalent to that on Marketaxess. With Tradeweb aggressively chasing and enticing dealers to fill any inventory gaps asap, is time genuinely running out for Marketaxess Europe?

So will Reuters step in here? The RTFI platform is 18 months old. It’s up. It’s working. But an injection of institutional customers and institutional flow which would be achieved by buying Marketaxess Europe (or some form of JV to at least host it within RTFI), would cement its position as a serious contender in the electronic fixed income space in Europe. Reuters then clearly offer a single application for all bond classes building from an actively trading institutional audience [as inherited from Marketaxess].

Of course the point that the customer changes their daily behaviour (/workflow) in order to trade somewhere other than in Marketaxess, is also the point that Tradeweb Credit is reviewed and seriously considered as a potential does-everything venue of choice. Though… building on that does-everything thought, if Reuters got their act together on ensuring the integration of RTFI with RTEX and RTFX is truly available, then they clearly have a broader integrated offering than available elsewhere….. Except of course IRS. Reuters don’t have an electronic offering for IRS. But of course they could strike a deal with Liquidity Hub to host the collective electronic IRS offering, making RT?? genuinely cover all of the bases. Alot of if‘s, but Reuters certainly say they are serious about defining and establishing their electronic trading presence/footprint….

But it’s not a slam-dunk. If there are to be discussions about buying/hosting Marketaxess Europe flow, I’d expect Bloomberg to be in the middle of these too, in order to demonstrably take AutoEx away from being just a retail/odd-lots venue (its not, but perception remains that it is), and of course as a defensive move to stick one in Reuters eye.

Thus Tradeweb launching their credit bonds segment really could dramatically change the landscape in Europe.



  1. Does BondVision do credit ? I’m totally in the rates world, so not really up on which platforms lead for credit. Wonder when Reuters will launch RFTM 😉 ?

    Comment by etrading — September 25, 2006 @ 9:03 pm

  2. If you call Agencies, Covered Bonds etc credit….then yes. Corporates….they are on there but their model is simple RFQ, no market depth or pre-quote price display, nor inventory….hence it does not suit the credit markets. Subsequently their volumes, as I understand it, in credit is essentially zero.

    Comment by waratah — September 27, 2006 @ 3:45 pm

  3. Speaking of credit, electronically, in general….in my mind it has been & continues to be, a big disappointment…..from the sell side, buy side and ECN view point….nobody seems happy.

    Is it a case of credit has been pushed too early, on the back of Govt success? I think so for Europe, and you can hardly say credit is new to e-platforms these days.

    Comment by waratah — September 28, 2006 @ 9:47 am

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