If global outstanding debt has grown by just 1% between March 2012 and December 2012, European outstanding debt has decreased by 0.1%. Japan is also decreasing, but the US, EMEA, and other countries have growing outstanding debt. However, we estimate that the European secondary trading activity is back on track, having grown by 8% between 2012 and 2013. In 2013, European average daily value in government bonds is estimated at €69 billion overall, up by 7% vs. 2012 levels at €64 billion. We estimate European nongovernment bonds ADV is also up by 10% from 2012 levels to €15 billion in 2013.

“The uncertainty regarding many European countries remains, but the market has gotten used to handling the situation,” says Joséphine de Chazournes, Senior Analyst and author of the report. “Market players are adapting to the new infrastructure, especially the two leading MD2C platforms and the top tier banks that keep holding the fort in FICC.”

Celent sees throughout the various markets the interdealer-broker-to-cIient (IDB2C) trend, slowly becoming more obvious as a solution for the changing market structure, and this report shows how some players are starting to get in that space in between the lines also in cash fixed income.

This report has the objective of providing an update of the October 2012 Celent report Fixed Income in Europe: Ready for the Tornado?, and hence is a very quantitative report, aiming to size the European cash fixed income market.