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T + 1 settlement – coming to a market near you ? Assuming the US and Canada go live in 2024 , I imagine the full impact of mismatched settlement dates ; funding costs and the ability to trade settlement FX will become more apparent to market participants . Will the UK and EU follow suit ? I don ’ t want to spoil the surprise . Adam Conn – head of trading at Baillie Gifford
For me the top theme is around optimising automation , focused specifically on the whole trade cycle . Development of transaction cost analysis ( TCA ) will become more important as we look to extract as much data as possible to make analysis more in-depth . Along with this the regulatory changes - especially with the US moving to T + 1 - will be important in terms of how we solve problems this may create . Mohammed Sohail , head of trading , Sarasin & Partners
A lot of the focus for asset managers next year will be around data . The macro-economic environment remains uncertain , with inflation and interest rates predicted to continue significantly impacting global markets next year . This challenging backdrop could encourage investment firms to further leverage data to help drive both effectiveness and efficiency . From a counterparty management perspective , increased use of data can enhance interactions , providing value for both the buy- and the sell-side . Ensuring consistent and high-level access to liquidity is always a priority , but in challenging markets when balance sheet can become more scarce , counterparty relationships are key . Another way data may be further harnessed by asset managers next year is around the execution process . When market conditions are tough , increased use of data can further drive performance , giving traders greater insights before they access the market . This can help the buy-side to calibrate counterparty panels continually and efficiently , at a very granular instrument level . Also , particularly in fixed income markets , real-time access to reliable data sets can help traders evaluate the right execution protocol for a given order . Ed Wicks , global head of trading , LGIM
The trading community has made great strides in the promotion of wellbeing , diversity , and sustainability in recent years . However , there is always more to be done , and I believe 2023 will see more trading desks addressing the importance of these topics . Perhaps we may even see a rekindling of the debate around shortening market hours in Europe , to help improve outcomes for end clients in terms of transaction costs , and to potentially address some of the themes above . Liquidity is always a hot topic , and as markets evolve , we have seen plenty of development from the sell-side , vendors , and venues to bring block liquidity together in efficient , cost-effective ways . Last year we also saw innovation focusing on small and midcap securities and it will be interesting to monitor the progress in this challenging area . Data and Technology . These are not new subjects , but the interrogation of trading data to help with pre-trade decision making and liquidity sourcing will continue to be vital in 2023 . Embedding this into trading applications is a challenge , and we may see the industry focus on interoperability solutions as the year progresses . Tom Stevenson , head of equity trading , EMEA , Fidelity International
We find ourselves in a market environment that we haven ’ t seen for a while , with increasing geopolitical instability , abundant inflation , diverging policies and greater market volatility . Given these changes , should execution methods remain the same ? Should we be continuing down the path of evermore automation and increased algo usage , or is it time to re-examine the benefits that risk transfer can offer ? There is no unique answer , and everyone will customise to meet their execution goals , but I expect assumptions to be challenged more than ever in 2023 . Additionally , forwards and swaps pricing will remain forefront in market participant
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