MTS, Europe's premier fixed income trading venue, has extended its market coverage to support the trading of inflation-linked Gilts following the successful launch of an electronic market for UK government bonds earlier this year.
MTS now enables Gilt Edged Market Makers (GEMMs) to electronically transact nominal coupon and inflation-linked Gilts both in the interdealer market and also dealer-to-client via BondVision, its B2C trading platform. Inflation-linked Gilt trading has been launched in response to demand from UK bond market participants seeking to hedge against inflation rates.
Electronic trading in the inflation-linked segment has proven beneficial to interdealer liquidity in the eurozone markets facilitated by MTS, resulting in more trading opportunities for dealers and their clients. This sentiment has been reflected in the interdealer and secondary MTS markets, resulting in:
• 49.3% increase in average daily volumes of inflation-linked bonds on the MTS Cash platform*
• 41.8% increase in BondVision B2C volume on inflation-linked bonds*
Oliver Clark, Product Manager at MTS comments: "Recent trends in the UK fixed income market have made electronic trading for inflation-linked bonds increasingly attractive. Our technology and market-expertise will deliver growth in liquidity as well as a more efficient and transparent inflation-linked Gilt market for all participants."
Other inflation-linked bonds available to trade on MTS Cash and BondVision include issues from France, Germany, Greece, Israel and Italy. Data on these bonds is offered as part of MTS' benchmark market data package, while their performance is tracked by the EuroMTS Inflation-Linked Index, part of the EuroMTS Indices family.
*Average daily volume for January-August 2011 compared to the same period in 2010