Mostly… fixed income and cross product eTrading

July 11, 2007

Liquidity Hub; Bloomberg or Reuters?

Filed under: etrading — holky @ 6:21 am

Reuters have very little low hanging fruit in terms of getting the Liquidity Hub product out to their “already installed users” of RTFI, compared to Bloomberg who already have BBTS and are also the de-facto terminal for most institutional fixed income traders in the rates space.  So looks like Bloomberg is a clear cut favourite to execute the first real Liquidity Hub trade … then get the first 100 customers onboard … and so on.

If you throw the “Reuters to Dump RTFI”news into the pot – then as waratah asked (albeit in not so many words) in his comment, how much effort do we really expect Reuters to make in terms of developing the swaps functionality for Liquidity Hub, then getting this out on the road to deploy this to customers?   ….. for the type of customers who the Liquidity Hub dealers actually want to see enabled … client takeon clearly being “a bit more involved” than dvp cash bonds autoex.   If you’re a client, is it a worry to signup to a Reuters platform with a potentially limited shelf life?

Sure, sticking Tradeweb in position to carry the swaps for Thomson-Reuters does give you an installed swaps clientbase, and a platform as proven as Bloomberg’s, but the Tradeweb and Reuters mashup isn’t due by LiquidityHub time – so what does Reuters do?  Develop its new swaps offering and distance it entirely from RTFI?  Re-invent its fixed income etrading offering as a specifically LiquidityHub channel?  Boast some new technology, new name (RTFS? RTFLH?), new tee shirts and caps… (leaving space on the branding for the Tradeweb logo in due course) … then tread water –  moving RTFI staff onto RTFLH .. and leaving RTFI to wither on the vine?

I can’t help thinking Reuters now has far too much on the go to make a big success of any Liquidity Hub etrading gui, and that all roads at this point lead to Bloomberg.  Great news for Bloomberg, but hang on…. as a customer, once you’ve decided you want swaps, and you’re going to use Bloomberg … then with access to BBTS and the singledealer autoex offerings, which don’t attract direct cost for using them, where is the sales pitch explaining why you actually need access to the Liquidity Hub broker code in your ALLQ and BBTS? 

Actually that’s where I was looking forward to Reuters stepping up to the plate to demonstrate something new. They still could. Reuters could avoid being a GUI and just open the door for customers to connect their own OMS/EMS to the Liquidity Hub stream. Become a routing intermediary in this order flow.

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1 Comment »

  1. Ouch! Holky, you’ve been swallowing the angry pills again. 😉

    In fairness to Reuters they have a large swaps trading community in the Bank Treasury arena, linked with their strong FX presence…..not e-trading, granted. Also, although late in comparison to Bloomie, I hear Reuters are well advanced in bringing a single-dealer swaps offering to market.

    Re: Bloomberg, I agree it is the terminal of choice in the the insto rates space, but it isn’t the e-trading system of choice amongst insto investors. A source close to Bloomberg (i.e. they work there) told me that senior management are very unhappy with the level of business being done in FI, that it is well below what they expected 3-4 years ago.

    A final point in Reuters favour (not that I’m looking to defend them) is that I understand LiquidityHub and the backing dealers appear very keen to ensure the volume split is as near to 50:50 as possible.

    As I mentioned yesterday, the biggest challenge for New Reuters will be how to run LiquidityHub and TradeWeb along side each other. A bit like the cola wars but within the same company!

    Comment by waratah — July 11, 2007 @ 7:50 am


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