The US rates market resembles the FX market five years ago

At a time when Goldman Sachs fixed-income trading revenue fell sharply in the first quarter – much of it tied to coal and struggling shopping mall retailers – one component that was not to blame was bond market liquidity. What is happening in US Treasury trading volumes “is more of a shift in who (and how) liquidity is provided, than a core drop in liquidity,” an April 20 Celent research piece observed, pointing to a new market making a reality in US Treasury market liquidity and alternative liquidity providers.

Alternative liquidity providers - US Treasury market is preparing to move more toward central clearing

There are multiple models for accessing...