Monthly Securities Finance Market Review: July 2024
Equilend’s Head of Trading Solutions, Mike Norwood, shares his monthly market review for securities finance, highlighting July trends and some highs seen across NGT. The following data has been measured and derived from Equilend NGT.
Trading by Sector for July: The Global Picture
Starting and ending with a flourish, July saw 2,825,390 trades agreed, versus $2.7 trillion on Equilend’s NGT platform. This figure represents +12% over June 2024 and +20% from July 2023 as both equities and fixed income saw increased demand at +13% and +38%, respectively. Following a new all-time daily high total trade count of 157,562 set on July 1 and resulting from index reconstitution activity, the remainder of the month saw relatively stable trading activity. Equity markets were flat until the last few days of the month as recessionary fears on the back of U.S. economic data started to impact market sentiment, resulting in a sudden sell-off.
The tech sector was in demand as earnings failed to impress investors, and they looked for small-cap names more likely to gain if the U.S. Federal Reserve cuts rates as expected, beginning in September. With reduced inflation readings and a cooling job market, markets are now pricing in two to three cuts over the balance of the year.
Fixed income remained in demand even as U.S. Treasurys (UST) gained 2.2% over the month around rate cut expectations. USTs saw 26% more activity on NGT year over year. APAC sovereign debt witnessed a 32% jump in trading activity as the Bank of Japan hiked interest rates and reduced purchases of Japanese Government Bonds. In the credit space, investment grade continues to represent the lion’s share of activity and was up 11% over July 2023.
Eyes will be on macro conditions in August as recessionary fears in the U.S. and the global market response will be front of mind after this week’s sell-off.
Within global equities, NGT’s most in-demand sectors were:
Stay tuned for the latest securities finance trends, trading analysis and commentary with Equilend’s Monthly Trading Commentary across 2024.
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Who We Are
Equilend is a global financial technology firm offering Trading, Post-Trade, Data & Analytics, RegTech and Platform Solutions for the securities finance industry. Equilend has offices in North America, EMEA and Asia-Pacific and is regulated in jurisdictions around the globe. The company is Great Place to Work Certified™ in the U.S., UK, Ireland and India and was named Best Post-Trade Service Provider Globally, Best Market Data Provider Globally and awarded for its Diversity & Inclusion in the Securities Finance Times Industry Excellence Awards 2023.
Mike Norwood
Head of Trading Solutions
michael.norwood@equilend.com
