December 6, 2018 / 11:28 AM / 7 days ago

Trading in U.S. debt surges as yield curve flattens - Tradeweb

LONDON, Dec 6 (Reuters) - Turnover in U.S. Treasuries jumped more than a third from a year earlier to an average $80.6 billion per day in November as investor activity picked up on the back of a flattening yield curve, trading platform Tradeweb said on Thursday.

The U.S. bond yield curve or the spread between ten-year U.S. debt over two-year maturities, shrunk to a more than a decade low of 11.3 basis points earlier this week from nearly 27 basis points at end-October on expectations that the world’s biggest economy was in the final stages of an expansion phase.

That has fuelled increased trading activity among market participants with greater volumes in U.S bonds rippling through other parts of the U.S. fixed income market such as mortgages, credit and derivative products.

Average daily volume in Chinese bonds, executed via Tradeweb on the Bond Connect platform, were up 10.5 percent on a monthly basis and around 35 percent higher on an annual basis, Tradeweb said.

China and Hong Kong launched the “Bond Connect” scheme last year to link China’s $9 trillion bond market with overseas investors, the latest step in Beijing’s efforts to liberalise and strengthen the country’s capital markets. (Reporting by Saikat Chatterjee; Editing by Dhara Ranasinghe)

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