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SEF Misery

Christopher Whittall, IFR, SEF shift compounds fixed-income misery, here.

The structural headwinds to fixed income have continued to mount this year, with the US swaps market beginning its momentous transition to exchange-trading through swap execution facilities in mid-February, causing a further dent in already depressed trading volumes.

Anaemic fixed-income activity is an ominous sign for banks, especially as their returns are heavily skewed towards the first quarter, with some executives predicting that more banks will be forced to scale back trading desks before the year is out to reflect the dwindling pool of returns.

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