Greenwich Associates has released its 2019 Leaders in European Fixed Income report. J.P. Morgan tops the list based on market share. Citi is second, followed by Barclays and Goldman Sachs. Fifth place is shared by HSBC, BNP Paribas and BofA Securities.

Technology is a key attribute of the market leaders. As e-trading and digital tools become a bigger part of the marketplace, European fixed income is increasingly becoming a scale business.

E-trading grew to 45% of overall European fixed-income trading volume in 2019 from 38% in 2018. More than half of corporate bond volume and over 60% of government bond trading volume is now priced and executed via electronic platforms.

Dealers that have historically invested in infrastructure to support quoting on multidealer platforms are making strategic investments to support new trends:

– Auto-pricing. Automated pricing of corporate and government bonds is now a requirement to be a top player. As e-trading has grown, so too has the number of inbound requests for quotes dealers must respond to on any given day and so auto-execution of such trades has become the norm, and Greenwich Associates expects continuous, streaming prices to grow in Europe as they have begun to do in the U.S.

– Portfolio trading. The growing importance of fixed-income ETFs has been the catalyst for increased interest in portfolio trading of corporate bonds.

– Streaming. Dealers are beginning to offer select clients direct streaming prices in fixed income via APIs. OMS/EMS technology makes it possible for investors to aggregate dealer streams and mimic the liquidity offered by existing multidealer platforms—common practice in the FX markets. As bid-offer spreads in fixed income narrow, there is increasing economic incentive for dealers to provide direct liquidity to clients without intermediation of the platforms and incurring platform fees.