2014 European Fixed Income Market Sizing: Electronic Strikes Back

by Joséphine de Chazournes, September 29, 2014
Industry Trends
EMEA

Abstract

This report provides an update of the October 2013 Celent report 2013 European Fixed Income Market Sizing: The Sun Breaks Through, and hence is a very quantitative report, estimating the size and structure of the European cash fixed income market.

Global outstanding debt was stable between December 2012 and December 2013, but European outstanding debt has increased this year by 1.8%, while the US and the EMEA region have had outstanding debt growth of above 5%. Japan’s outstanding debt keeps tightening, by 16% year on year.

Celent estimates that the European secondary trading activity is still growing, though slowly, by 3.5% between 2013 and 2014. In 2014, European average daily value (ADV) in government bonds is estimated at €72 billion overall, up by 6.1% vs. 2013 levels at €68 billion. We estimate European nongovernment bonds ADV is down, however, by 8.6% from 2013 levels to €13 billion in 2014.

“The key trend in 2014 has been that buy and sell side alike have heavily focused their attention on solving the liquidity issue in the non-government bond market,” says Joséphine de Chazournes, senior analyst and author of the report. “Interestingly, the tier 2 and tier 3 banks that have built global electronic capabilities to reach emerging liquidity pools and connect to the latest venues have grasped market share.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

3

Market Overview

4

 

Market Size

4

 

Market Structure

7

The Government Bond Market

12

 

The Interdealer Market

14

 

The Dealer-to-Client Market

15

The Nongovernment Bonds Market

17

 

Financial Debt

17

 

Corporate Debt

18

 

The Interdealer Market

20

 

The Dealer-to-Client Market

20

The Electronic Trading Platforms

22

 

The Interdealer Market

22

 

The Dealer-to-Client Market

24

Conclusion

27

Leveraging Celent’s Expertise

28

 

Support for Financial Institutions

28

 

Support for Vendors

28

Related Celent Research

29

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