[ MEET THE DESK | RBC BLUEBAY ASSET MANAGEMENT ’ S LONDON FIXED INCOME DESK ]
are on the back of news headlines and movements in the market . We have to act quickly on them . It ' s not building up over weeks and weeks . We may have the idea that we would like to do something if levels get to this particular target - and obviously anything can spike that movement so we just need to make sure that we ' re there and ready .”
Relationships are essential to the developed markets business . For credit trading in particular , around 90 % of trades are still conducted by voice as due to the size of orders , market impact becomes a real concern for traders when looking to execute . This makes some electronic and algorithmic methods of trading more of a market disruptor , the team explain .
“ A lot of what ' s quoted out
there by algos is a disruptor in our market because everyone sees the best price that they want to buy and sell bonds at but everyone wants to trade at those prices all the time . That ' s not really how the market is trading ,” explains Grimstead .
Grimstead joined BlueBay 18 years ago and covers anything to do with European credit , which typically consists of larger blocks , as well as rates and AT1 products .
“ Everyone wants it [ credit ] to trade like in an equity world where you want to buy Microsoft and there is only one Microsoft stock to buy . If you want to buy Microsoft bonds , you ' ve got a different currency , maturity . You ' ve got so many different opportunities to do things . It just can ' t work in that way . From an institutional standpoint , if I want to trade 100 million , that ' s not being done electronically ,” he says .
“ Pretty much every run you see in the US works . The thing in Europe is there ' s a lot of runs that go out there that are just a little bit meaningless at times . There ' s no intention of it being misleading , but if you
46 // TheTRADE // Q3 2023