Record-Breaking Global Repo Activity Reported by Tradeweb in April 2024

• Tradeweb reports a record-breaking total trading volume of $41.9 trillion in April 2024.
• Electronic repo activity sees a significant surge due to quantitative tightening, increased collateral supply, and current rates market activity.
• Repurchase agreement ADV was up 39.4% YoY to $598.2 billion.

Tradeweb reports a record-breaking surge in global repo activity in April 2024, driven by quantitative tightening, increased collateral supply, and current rates market activity. The total trading volume for the month reached an impressive $41.9 trillion.

Surge in Rates

U.S. government bond ADV saw a 70.7% YoY increase to $205.3 billion, while European government bond ADV was up 23.9% YoY to $45.6 billion. This growth was supported by all client sectors, with increased adoption across a wide range of protocols and favorable market conditions. Mortgage ADV also saw a significant increase of 34.8% YoY to $206.1 billion, largely due to elevated roll activity and a spike in volatility.

Increased Activity in Credit

Fully electronic U.S. credit ADV was up 96.1% YoY to $8.0 billion and European credit ADV was up 19.4% YoY to $2.3 billion. This increase was driven by increased client adoption, particularly in request-for-quote (RFQ), portfolio trading and Tradeweb AllTrade. Municipal bonds ADV was up 20.8% YoY to $347 million, outpacing the broader market which was up roughly 6% YoY. Credit derivatives ADV was up 65.0% YoY to $15.3 billion, driven by increased credit volatility and credit default swap indices (CDX) roll trading.

Equities and Money Markets

U.S. ETF ADV was up 24.8% YoY to $7.8 billion and European ETF ADV was up 19.4% YoY to $2.8 billion. The increase in volumes was due to more clients embracing Tradeweb’s electronic RFQ protocol. In money markets, repurchase agreement ADV was up 39.4% YoY to $598.2 billion, driven by increased client activity on Tradeweb’s electronic repo trading platform.

Conclusion

The record-breaking global repo activity reported by Tradeweb in April 2024 is a clear indication of the dynamic and evolving nature of the financial markets. The combination of quantitative tightening, increased collateral supply, and current rates market activity has shifted more assets from the Federal Reserve’s reverse repo facility to money markets. This trend is expected to continue as markets price in less aggressive Fed rate cuts.