“ As much as it ' s the same desk , same people and same screens , what is on those screens and what ' s happening is different .” diversifying their liquidity sources in times of stress .
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performance and analytics . She began her trading career on an all-female trading desk , and says it was watching the world ’ s news play out in the markets that drew her to trading .
“ I loved the idea that I could interpret what was going on in the real world and then see how the markets reacted to that ,” she says . “ The changing face of it every day . I still love it . It is a different job every day . As much as it ' s the same desk , same people and same screens , what is on those screens and what ' s happening is different . I ' ve been in the industry long enough to see some of the pits and the rises and falls of interest rates , a lot of people haven ' t yet .”
Ruffles has been with State Street Global Advisors , an institution she affectionately describes as homely , for 19 years . Heading up fixed income trading from 2004 onwards , the trading team has grown from two to five dedicated Londonbased fixed income traders under her stewardship and covers everything from government and investment grade credit bonds to convertible and emerging market bonds and derivative products .
Expect the unexpected The last few years have had a transformative effect on fixed income . Black swan events such as the global pandemic and the invasion of Ukraine have sparked a chain of events that have led to macroeconomic disarray across most of the globe all on the backdrop of significant technological advancement as volumes move on-venue .
During the final weeks of July and first week of August , the European Central Bank , the US Federal Reserve and the Bank of England all opted for further rate hikes . The decisions have set the stage for unprecedented levels of activity in fixed income which has seen otherwise subdued fluctuation in rates globally in recent years . For Ruffles , the divergence of economies globally is what fixed income traders must pay most attention to going forward .
“ We know that the UK inflation has been sticky . We ' re starting to think about the divergence of economies now ,” says Ruffles . “ While we ’ ve been in a rate rising world globally , I think we ' re about to enter into the paradigm of some countries reaching their terminal rate . It might not be that they stay there forever but they ' ll stay there just to see how the rate increases have embedded into the economy and what impact they ’ ve had .
“ We ' re constantly on the lookout for what could move markets and therefore what could impact a trade . It ' s knowing what to expect and then expecting the unexpected .”
The hunt for liquidity Liquidity is already typically more fragmented in fixed income - no new story there - and the macroeconomic activity from the past few years has re-stressed the need for participants to ensure strong relationships with counterparties while also
“ As much as it ' s the same desk , same people and same screens , what is on those screens and what ' s happening is different .” diversifying their liquidity sources in times of stress .
Some counterparties are less able to warehouse risk and inventory to the same extent as they were before and this has led many buy-side shops , including State Street Global Advisors , to assess new ways of finding liquidity .
“ We ' re looking for market makers to risk price for us ,” Ruffles explains . “ Those relationships that we have with our counterparties are really important in order for us to make sure that we ’ re able to access good prices and liquidity .
“ However , sometimes it ’ s a bit like retail shopping . You go into the shop and they don ' t have the sizes that you want anymore but you can get it online . It ’ s that evolution that has happened . The sell-side sometimes don ' t have
22 // TheTRADE // Q3 2023