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ICE Fixed Income Monthly
November 2022

ICE Fixed Income Monthly Report

In this edition, we bring you our latest sponsored report with Coalition Greenwich which examines the evolution of data and technology being used by buy-side firms. You can also listen to our VP of Fixed Income Corporate Development Michele Nicoletta on the latest trends in fixed income.

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Amanda Hindlian
Amanda Hindlian
President, Fixed Income & Data Services


The $24 trillion U.S. Treasury market has been in the spotlight, with liquidity concerns weighing on a market that is crucial to overall confidence. There’s been speculation that a breakdown in Treasury trading could ripple through global markets — with earlier tumult in U.K. Gilts possibly offering a preview, albeit on a smaller scale. Yet for all the attention on Treasuries, there’s a market that is a close second in terms of size and should be examined for similar vulnerabilities: the $12 trillion U.S. MBS market.

As I noted in my earlier commentary, the Fed’s attempt to shrink its balance sheet through quantitative tightening means it is intentionally stepping away from a bond market it has propped up for a long time and in record amounts. Doing so when rates are being hiked at a historically fast pace could have unintended amplification effects.

So, what red flags am I watching for? ICE’s Liquidity Indicators service uses inputs like price volatility, bid-ask spreads and observed trading volumes to generate metrics that can help quantify the ease (and cost) at which assets can be bought or sold in the marketplace. From a liquidity standpoint, the trend is clear: as seen in the charts, all three are moving in the wrong direction. Given the relationship between MBS pricing and borrowing rates offered to residential home buyers, worsening liquidity could harm household finances.

There are some reasons for optimism though. For example, mortgage rates recently saw their biggest three week drop in 14 years — a welcome reprieve for buyers. And while it will take time for tighter monetary policy to work its way through the system, the rate of growth in inflation has begun to slow, allowing Federal Reserve Chair Powell to signal that the pace of rate increases is likely to slow as well.

Agency MBS TBA


Price Volatility

Average Daily Trade Volume

Source: ICE Data Services

Elsewhere in bond markets

Transforming today’s fixed income markets

Fixed income markets have an acute need for better analytics. Amid growing digitization, a proliferation of data means many buy-side firms are grappling with how to best process, analyze and glean insights from the information they consume. Some have turned to evaluated pricing and advanced technology to find liquidity and navigate volatility, amid an uncertain macroeconomic outlook. Others are charting a hybrid approach to data management. So how has the role of pre-trade information changed? And what’s next in terms of cloud and API adoption? Our sponsored report with Coalition Greenwich examines the evolution of data and technology being used by buy-side firms.

Read the report

ICE Fixed Income Forum - Sessions Replay

We held the inaugural ICE Fixed Income Forum at the iconic New York Stock Exchange. The forum brought together industry leaders to talk about the latest trends and challenges in the fixed income market. It also featured best practices from industry peers on finding efficiencies and automation across the front, middle and back office, as well as discussion about the regulatory landscape and the impact of ESG on fixed income investments. Sessions and additional resources are available on-demand.

Watch now

ICE Trading Analytics

Our director of business development Pedro Geri explains why there is an increased need for vast amount of pricing data and robust trading analytics in the fixed income market and how ICE’s trading analytic solutions can help support trade decisions.

Watch the video

Fixed income: from trading-centric to data-centric

Our vice-president of fixed income corporate development Michele Nicoletta explains how data and technology has changed the fixed income market structure and the skill sets that are required by fixed income managers.

Listen to the podcast

Related solutions

Best Execution Service

A statistical distribution approach for measuring bond trade execution quality, our Best Execution Service utilizes ICE’s evaluated prices to help clients monitor trading activities and to help measure trading effectiveness across the growing number of venues and protocols more closely, which can assist users with meeting regulatory obligations.

Municipal Bonds

Munis are a highly fragmented market, where data can be scarce and inconsistent. The challenges created by one million active securities, over 50,000 issuers and fewer than 1% of munis trading daily mean new ways of doing business have been a long time coming. ICE’s expertise, data and technology help connect muni market participants to new opportunities.

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