The overriding theme at the Fixed Income Leaders Summit (from presentations, panels and discussions on the exhibition floor) was the changing landscape for buy-side Fixed Income market participants, and in particular how they should handle the growing tide of data for electronic trading.
New Sources of data are coming from multiple sources
- Fenics officially launched their US Treasury platform with a buy-side focus, and already has plans to extend from on-the-runs to off-the-runs, tips and agencies
- MarketAxess commented that All-to-All trading is accelerating, with 8 pricing algo’s now live and 20% of orders getting price improvement
- MTS BondsPro has 20,000+ securities streaming live, with buy-side customers now asking for raw API access
- Neptune is gaining good traction as a source of Axes
- Other All-to-All venues gaining traction include OpenDoor and LiquidityEdge (plus there were many conversations about the purchases of TMC Bonds, Bondpoint and of course Brokertec by Exchange groups)
B. Regulatory Reporting
- TRACE in US
- APA’s in Europe
C. Internal Sources
- OMS systems
- Quote Requests and Chats
Capturing and Managing the Data
There was a general recognition that the buy-side needs technology to firstly manage the abundance of data and secondly to utilise it for decision making -
- Blackrock are focusing on building out their existing OMS technology
- Wellington are aggregating across different platforms
- Pictet has formed a data science group, to make sense of the data it receives
- Other firms are at an earlier stage in the process. They recognise they need better technology, but currently have systems which are focused solely around their existing OMS.
Philip Brittan at Crux Infomatics, supported the notion of a data tsunami when he said, "The volume and velocity of data is exploding, and firms are struggling with the task of making sense of it all."
Steve also attended a session on AI/Machine Learning, but came away with the impression that these technologies are still at an early stage. Obviously there is significant potential due to the huge datasets, but there are still problems in making meaningful interpretations of data in Fixed Income because of the abundance of “noise”
For more information read Terry Flanagan's piece for Markets Media, which includes the following - "The buy side has no shortage of information and statistics to sort through. On the contrary, now there’s a problem of too much data, which begets the challenge of how to sort through it to find what’s valuable, and how to deploy the data in a way that adds value in a complex and often high-speed electronic market."
Overall the Fixed Income Leaders Summit was a great event. Many thanks to Oliver Kirkbright and the rest of the WBR organising team. See you again in Hong Kong, Singapore and Amsterdam.