“Despite any pause in e-trading growth overall, market participants of all types are investing heavily in algorithmic pricing, which will eventually become a powerful force in fixed-income,” says Tom Jacques.
“There are probably going to be people who find themselves training machine learning technologies that may take their job away,” says Richard Johnson, who has studied the impact of AI on Wall Street.
Findings from a Greenwich Associates survey this year paint a similar picture, with a third of hedge funds using alternative data to identify new strategy ideas.
Jay Bennett added: "Brokers in this market would love some volatility — whether it came from a spike in investor conviction or fear."
“If providing buyers and sellers of corporate bonds with tools that allow them to trade with each other marks the first phase of the market’s evolution, gathering, analyzing and putting to work data is phase two,” said Kevin McPartland.
“Brokers in this market would love some volatility—whether it came from a spike in investor conviction or fear,” Jay Bennett observed.
Almost half of those interviewed by Greenwich Associates for a report last year said they’d started using ETFs within the past two years, and almost 25 percent started buying within the previous 12 months.
European institutional investors plan to cut spending on equity research by 1% in the next 12 months — in contrast to the 6% to 7% projections a year previous — ahead of new research payment unbundling rules, shows research by Greenwich Associates.
Kevin McPartland: “The bond market’s post-crisis liquidity decline has been spread across an increasingly diverse list of bond issues represents a challenge that is driving a search for new skills and new technology on buyside trading desks.”
The regulation that some expected would kill sell-side research isn’t doing so yet, according to a Greenwich Associates.
