This report provides an update of the October 2013 Celent report 2013 European Fixed Income Market Sizing: The Sun Breaks Through, and hence is a very quantitative report, estimating the size and structure of the European cash fixed income market.

Global outstanding debt was stable between December 2012 and December 2013, but European outstanding debt has increased this year by 1.8%, while the US and the EMEA region have had outstanding debt growth of above 5%. Japan’s outstanding debt keeps tightening, by 16% year on year.

Celent estimates that the European secondary trading activity is still growing, though slowly, by 3.5% between 2013 and 2014. In 2014, European average daily value (ADV) in government bonds is estimated at €72 billion overall, up by 6.1% vs. 2013 levels at €68 billion. We estimate European nongovernment bonds ADV is down, however, by 8.6% from 2013 levels to €13 billion in 2014.

“The key trend in 2014 has been that buy and sell side alike have heavily focused their attention on solving the liquidity issue in the non-government bond market,” says Joséphine de Chazournes, senior analyst and author of the report. “Interestingly, the tier 2 and tier 3 banks that have built global electronic capabilities to reach emerging liquidity pools and connect to the latest venues have grasped market share.”