MarketAxess (MKTX) Barclays 22nd Annual Global Financial Services Conference 2024 summary

Market trends and electronic trading adoption

• Fixed income markets, especially U.S. Treasuries, are increasingly electronic, but corporate bonds are only about 50% electronic, with significant room for growth, potentially up to 90% over time.

• Emerging markets are in early stages of electronification, with strong growth in both hard currency and local markets, especially in LATAM and APAC.

• Portfolio trading and block trades are driving further adoption of electronic protocols, with innovations targeting larger and more complex trades.

• Macro factors like rate expectations, labor market data, and volatility spikes have recently boosted trading volumes and fee capture.

• New issue activity and ETF trading are contributing to heightened secondary market volumes.

Product innovation and technology enhancements

• X-Pro platform replatforms the trading experience, enabling rapid client-driven enhancements and advanced pre-trade analytics.

• Portfolio trading tools now offer analytics to optimize trade construction, helping clients decide between portfolio and line-item trades for better execution.

• Adaptive Auto-X automates block trading, slicing orders to minimize information leakage and enabling clients to respond to RFQs efficiently.

• Pragma acquisition has accelerated algorithmic trading, smart order routing, and automation suite integration, enhancing speed and efficiency.

• X-Pro and automation suite are being rolled out globally, including Europe and emerging markets, with rapid client adoption.

Protocols, liquidity, and market structure

• Open Trading (all-to-all) remains a core liquidity driver, with unique liquidity providers and a growing share of credit trading, recently reaching 36%.

• Dealer-to-dealer trading is expanding, now about 30% of market revenue, with new solutions like Dealer RFQ and Mid-X for efficient inventory exit.

• Partnerships, such as with ICE/TMC Bonds, are broadening access to retail and institutional liquidity, especially in municipals.

• Protocol agnosticism and openness to external liquidity sources are emphasized to meet diverse client needs.