Electronic trading of US Treasuries is on the rise, driving demand for connectivity

More and more asset classes are being pulled into the e-trading markets, driven by sweeping regulations and desire to standardize product flow. Fixed income has been a particular target over the last three years, a trend that has involved efforts to build new architecture and platforms to compete electronically.

While treasuries have been seeing high levels of automated trading for the better part of a decade, they have met with challenges on the buy-side in costs of operation and impact on trading infrastructure. But with the Federal Reserve considering tapering its quantitative easing efforts the trading opportunities are more enticing.

SIFMA reports that of the more than $500 billion in US treasury trading volume, roughly 40 percent is now electronic. It further reports trading activity is up to 6 percent year over year for the first nine months of 2013.

The boon has been noted by technology vendors, who report a building customer interest in solutions that lower cost of connection to the marketplace.

Along those lines, global electronic trading technology provider InfoReach announced today its new fixed-income trading functionality with direct access to US Treasuries.

According to the press release InfoReach is launching its connection to the NASDAQ OMX eSpeed platform, which operates a fully executable central limit order book for electronic trading in benchmark US Treasuries.

Mutual clients can now directly access the eSpeed marketplace and execute fixed income trades through the InfoReach TMS and Prelude trading platforms. The connectivity between eSpeed and InfoReach also allows both firms to provide access to additional customers in the future and expand their global distribution, according to InfoReach.

“As client demand for electronic fixed income trading continues to increase, this certified connectivity will make it easy to provide access to additional customers,” said Joe Noviello, senior managing director of NASDAQ OMX eSpeed in the release.

“I can’t think of a better way to introduce our new fixed income trading functionality than with direct access to a global player like NASDAQ OMX eSpeed,” adds Allen Zaydlin, CEO of InfoReach. “Their proven expertise in the electronic execution of U.S. Treasury Securities combined with the ability to trade and hedge fixed income and other asset classes from a single InfoReach front-end will provide customers with a formidable advantage.”

Read full article >>