The whole we’ll taper soon, oh no, actually not yet behaviour from the Federal Reserve last summer had, as you would expect, an impact on the volume of US treasury trading.
But it didn’t last. JP Morgan reports that monthly trading volumes of $2tn in April rose to an average $2.7tn in May and June, then dwindled with overall volumes for the year actually down on 2012. What might surprise, however, is that the post crisis decline in volatility for Treasuries (and many other securities) has not been seen in German Bunds and Japanese sovereign debt. Read more
So US equity trading volumes are now at four-year lows. Or five-year lows. Whatever, they’re low, but it’s also August.
Something to keep in mind as the global risk asset rally — which appears driven by some combination of better-than-expected-but-not-that-awesome US macro data and… talking from European policymakers — continues. Read more
Kid Dynamite made a good point in the comments of our post on Monday about falling daily US trading volumes: they could just be a correction to the churning frenzy that took place during the crisis, not necessarily a signal that volumes are destined to keep falling perpetually.
And at the end of the first quarter this year, Barry Ritholtz posted this excerpt from a Bank of America Merrill Lynch note (hat tip to Tim Duy for sending it our way): Read more
Does anybody know what’s been driving down daily US trading volumes in recent years?…