Deutsche Bank and JP Morgan Named Leaders in US Fixed Income Trading

Deutsche Bank and JP Morgan emerged from the credit crisis as the leading US fixed-income dealers in market share terms, and these firms share the title of Greenwich Associates Share Leaders in Overall US Fixed Income for 2010. As 2010 Greenwich Share Leaders, Deutsche Bank has a market share of 12.8% in US fixed income trading and JP Morgan has a market share of 12.5%.

Both firms deploy top-notch electronic trading platforms – with trading activity in US fixed-income markets moving to highly liquid rates products, e-trading capabilities are becoming increasingly important as a means of differentiating a firm’s capabilities and winning business.

“Deutsche Bank’s strong position this year can be attributed to its gains in interest-rate swaps, MBS [mortgage-backed security] pass-throughs and US Treasuries – the three largest products in the US market by volume,” said Greenwich Associates consultant Tim Sangston.

Trading Market Share

Overall, the gap between the leaders in trading share and the rest of the market’s competitors is narrowing as the competitive landscape for dealers flattens. In 2009, the difference between the number-one ranked dealer and the seventh ranked dealer was roughly seven percentage points of market share; in 2010, that difference shrank to only three and a half percentage points.

In 2010, Barclays Capital trails market leaders Deutsche Bank and JP Morgan by only one-to-two percentage points, with Citigroup and Goldman Sachs close behind. Barclays Capital and JP Morgan rank among the top three in market share in a broader number of products than other dealers.

“The changes now unfolding in the market and future changes associated with new regulations are making liquidity and other factors that differentiated dealers in the past less visible,” said Greenwich Associates consultant Andrew Awad. “All of the major sell-side firms have the required infrastructure needed to be competitive, and in these highly liquid products any firm with the right platform can compete on the basis of price.”

Leaders in Quality

In this rapidly evolving environment, Barclays Capital has retained its title as the Greenwich Quality Leader in US fixed income. Not far behind in quality ratings are JP Morgan and Banc of America Merrill Lynch. “In an increasingly important category, Barclays Capital, Banc of America Merrill Lynch and JP Morgan remain the leading dealers in electronic trading for the fifth consecutive year,” said Greenwich Associates consultant Woody Canaday.


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