Our Finance Hive fixed income members have undergone huge changes to their desks and the way they trade over the past few years. Following requests from our community, we’ve set out to understand what has influenced members’ trading strategy the most over the last 12 months and how it is set to change over the next 12 months. We are also seeking to understand how they use historical data to manage execution, the results they are seeing and market structure predictions.

With this in mind, we have created this collective voice and aggregated the buy side perspective on how fixed income credit trading strategies and execution preferences have changed – and how this is set to develop over 2024 and beyond.

Features record buy side commentary and analysis from:
Paul Cable, Head of International Fixed Income Trading, T. Rowe Price
Shaun Copeman, Senior Trader, Federated Hermes 

A few highlights:

• From what can be seen in this report, although automation continues its ascendancy within credit trading desks, there remains significant room for improvement, with over 50% of trading flow still reliant on manual processes.
• A collective ambition amongst buy side participants is to bolster proficiency in understanding liquidity conditions, influencing liquidity provider selection, and refining execution strategies. Historical data emerges as crucial for liquidity provider selection, with third-party data holding significant value in illustrating liquidity conditions.
• Data continues to be perceived as a critical tool for gaining a competitive edge and enhancing trading efficiencies, with three-quarters of respondents willing to invest in new third-party technology to advance in this domain.
• Nearly 15% of respondents are still executing manually, rather than electronically.
• 80% of respondents are using data to drive liquidity provider selection, however, when rating the quality of that data nearly 70% rated that data 7 or lower out of 10 for its accuracy and usefulness