[ F I X E D
I N C O M E
L E A D E R S
S U M M I T
2 0 1 8 ]
“I don’t care what
happened 10 years
ago, I care what is
happening in the next
five or 10 days.”
LEE SANDERS, AXA
INVESTMENT MANAGERS
FIXED INCOME LIQUIDITY
SOURCING AN ‘EXCITING’
CHALLENGE FOR THE
BUY-SIDE
BUY-SIDE MAY BE ABLE TO BECOME FIXED INCOME
MARKET MAKERS IN FUTURE THROUGH OPEN
TRADING ACCORDING TO PANEL.
S
enior buy-siders at this year’s
Fixed Income Leaders Summit
have said the ongoing search
for fixed income liquidity is an
exciting search for their trading
desks as markets are seeing a huge
level of innovation and new trading
platforms.
The proliferation of new trading
venues and technology vendors in
the fixed income space in recent
years has led to new methods of
trading for the buy-side and panel-
lists were keen to look to the future
instead of focusing on the problems
of the past.
36 // TheTrade // Winter 2018
“It’s probably the most exciting
period of liquidity sourcing I’ve ever
lived through,” said Lee Sanders,
head of execution FX and UK &
Asia fixed income trading at AXA
Investment Managers. “Every day
is a challenge for liquidity, either
in the credit world or the world in
which we operate it is very hard to
say how you are going to find that
liquidity as every deal is unique.”
Sanders detailed how the firm
has been examining open trading
sources for new liquidity op-
portunities, particularly around
buy-side-to-buy-side trading, a sen-
timent echoed by Ricky Goddard,
European head of credit trading at
Schroders.
“Every bond issuer seems to have
20-30 bonds often with the same
people and the same maturity, and
it just highlights how disparate the
market is and that liquidity isn’t
centralised in one particular place.
So we are forced to be ever more
creative about how we trade and
that does involve initiatives like all-
to-all platforms,” Goddard said.
“It might potentially evolve in the
buy-side having to make markets
in bonds and provide two-way
markets to the street. These are
the types of things we are thinking
about going forward.”
Panellists agreed that while there
are still historic market structure
issues that can hamper the search
for liquidity, there was little to be
gained in comparing how the cur-
rent markets stood in the past with
the markets traders find today.
“The whole liquidity dynamic…I
don’t care what happened 10 years
ago, I care what is happening in
the next five or 10 days,” said AXA’s
Sanders. “I’ve got fantastic traders
knocking themselves out on a day-
to-day basis to find that liquidity,
that’s what the modern buy-side
trader does, it’s probably the hard-
est time in our history to source
liquidity and bring these things to
conclusion.”