Jamie: [00:02:04] Hello, and welcome to another scintillating episode of a Hedge Fund Huddle. I am your host, Jamie McDonald. As you well know by now, we are the podcast that dives a little deeper into the hedge fund world. And today it's no different. In this episode, we're going to be looking at hedge fund trading as it relates to fixed income and bonds. And I think it's worth mentioning, even at this point, that when most people think of hedge fund strategies, they typically think equity long-short, at least historically, that was very much the case, and it was the world that I was in. But increasingly more multi strats are appearing. More is being done in other asset classes like currencies, commodities and of course credit. So today we're going to examine that trend and specifically the role that electronic trading is playing in it. So, let's talk a little bit about this evolution. And I'm thrilled to say that I have two experts on the topic to help me do exactly that. Firstly, we have Rodérick Joniaux, Product Manager of European Government Bonds at Tradeweb. Rod, welcome to the show.
Rodérick Joniaux: [00:01:11] Hi, Jamie. Thank you for the invite.
Jamie: [00:01:13] David Rickard, global head of fixed-income trading workflows at LSEG. David, also welcome to the show.
David: [00:01:19] Thanks, Jamie. Appreciate the time.
Jamie: [00:01:21] Good. So, guys, for the few people who don't know who you are, who may be listening. What I'd love to do is start by asking you how you got to where you are today. A quick synopsis of your career so far, but also why did you make the decisions you made? Like what interested you about this world? And perhaps, Rod, we can start with you.
Rodérick Joniaux: [00:01:39] Yeah. Thanks, Jamie. So, I guess take a step back and you probably will hear it during the podcast, but I've got a French accent. I'm born in France. I moved to London about 14 years ago. And I've been at Tradeweb for about 12 years now. That does make me feel actually quite old. So, I started my career in an American bank in London in trading of government bonds. And here at Tradeweb, I look after the European government bonds, as well as supranational and covered bond products in London. I first moved to trading as I was interested in macro environments and in rates in particular, but also in tech. And I got this opportunity at Tradeweb, 12 years ago, as I said, to work for one of the leading fintech at the time, leading trading platform. And yeah, to contribute with my experience as a trader to Tradeweb and I guess a lot of the people here in my company are ex-markets people, whether on the buy side or on the sell side. We're here to help come up with solutions to trading workflow for clients. And as we are ex-market people, we've got inside knowledge on how it works on the trading desk as well.
Jamie: [00:02:42] And can you talk a little bit about your specific role today, Rod?
Rodérick Joniaux: [00:02:45] Yeah. So as a product manager in government bonds, I guess our typical day is first and foremost to make sure that our clients both buy side and sell side, can connect effectively to our platforms, can trade all around the clock, all around the world, and really try to improve their trading workflows and to solve their pain points and challenges that they might have when trying to trade asset classes. In my case, electronic government bonds and supranationals and covered bonds. And yeah, we partner with clients and both dealers and the buy side as well on that front. And to make sure we come up with the right technology, the technological advancements.
Jamie: [00:03:24] And try and keep up with the number of tweets that seem to come out on an almost minute by minute basis. David, same question to you. How did you get started in this business and how did you end up where you are?
David: [00:03:33] Believe it or not, I. It's funny to hear Rod say he feels old. I'm 25 years, I think, now in the business. And for me, it was I came out of university. I did an economics degree. I really had a passion for markets and an interest. And I was fortunate enough early on to break into the front office and start working as a trader for Bank of Ireland in Dublin back in the early 2000s. I moved on from there to, to trade across interest rate markets, FX markets primarily Sterling, but also Euros and Dollars. Then midway through my career, I had a little bit of a okay, what's next? Where do I go? Do I want to keep doing this? And I managed to pivot into more product management product strategy for electronic trading. Went to work for one of the big brokers. Had spent some time in the US. Came back to London. Then in the last few years, I've joined LSEG running our fixed income workflows business. So moved away from my early days of trading. Now managing a software business effectively, which sell tools, data analytics for the front office.
Jamie: [00:04:41] So, David, that move away from frontline trading more towards product structuring and management, was that stress related? Like I just don't want to be I just don't want to be so pressured all the time. Or is it just it was just product structuring became more interesting for you. What drove that change?
David: [00:04:58] I think I think a few things really. The market had changed very dramatically from when I started. If you think early 2000s, this is before the great financial crisis. This is before all the bailouts we saw. This is before heavy regulation so that world for Delfi trading, prop trading, flow trading is very, very different than the world we have today. And we're going to talk about some of this in terms of electronic trends. And I found that evolution quite challenging from a personal performance point of view in the markets. The markets had changed a lot from the early days when I traded. Then in the latter half of my trading career, I moved to a prop trading firm. I was working in Chicago for some time, and I found that very gruelling at times, not so much emotionally stressful, more physically stressful, I guess you could often be trading 22, 23 hours a day. And it was fascinating moments to it. But it did lead me to question, is this long term sustainable? Is this really what I want to do? And then when I looked around the industry and thought, well, what else could I do? I like the idea of moving more into a business owner role. And I was lucky really with my network and the opportunities that came along that, that I've ended up where I am. I guess that's the, the, the short answer.
Jamie: [00:06:22] But no, for me, it's particularly an interesting story because I think there'll be people listening who will enter trading in a market that's so different now than it was when they started. And some markets just aren't suited to everyone. And being able to be adaptable and flexible in your career, is an important thing to understand. So, Rod, I wanted to come back to you. You said when you started at a large American bank, you were trading government bonds. I really want a kind of a very quick 101 of what trading government bonds was like back then. And then let's talk about the dynamic change to where we are today and the evolution of electronic trading.
Rodérick Joniaux: [00:07:03] Yeah. Good question Jamie, actually. So, when I was a trader, I was part of a trading desk. A government bond trading desk. I guess it was my dream job at the time when I was after uni. I wanted to get into trading. And it was. It was a good role and a great desk. But obviously the stress element that you mentioned yourself, it was definitely there and not something you can learn at school for sure. And it was both, I guess, voice and electronic trading. Electronic trading has been there for a long time, and in some ways, it appears quite behind in our in our world, in the fixed income world in terms of sophistication compared to, I guess, the equity markets or the foreign exchange markets. And it's quite difficult to have a complete view of what trades voice against electronic these days because in Europe at least, we don't have what we call a consolidated tape recording all the trades. But clearly over the past decade at the time I've been here at Tradeweb, The European fixed income markets have experienced a huge shift towards automation and electronic trading. And I think to your question, several factors influence that right. So, we have regulatory reforms, which I'm sure David was also involved in 2018 with the MiFID II, MiFIR going into play. These reforms introduced huge changes to the financial markets in Europe. Increase the transparency for participants. And that's really when we saw a lot of players come into play into trading electronically.
Rodérick Joniaux: [00:08:27] New clients, new type of clients trading electronically. And I know we're going to speak about hedge funds obviously. That's definitely one of them, really because they notice the advantages of trading electronically, whether it's the straight through processing that is out there now, whether it's transparency elements. So that was definitely the first, I would say, aspects of what has increased that transition. The second thing, which is really for all of us was the reality was the impact of Covid 19. The pandemic, I can't believe it's actually, more than five years ago we went to lockdown now. But that definitely accelerated the trend of what we call the digitalisation of markets. Really when we worked from home, that meant that trading platforms, electronic trading, which were offering, multiple products in the same place became, what I would call maybe the virtual street. We were meeting customers where they were, in front of their screens at home in a way, kind of removed from the trading desk, from their teams, from their data feeds, even. So, it's definitely a big factor in the in the electrification of markets. And the third one and the most obvious one is kind of the technological advancement. Platforms like ourselves, but others streamlining the trade execution, improving efficiency and really aiming to improve the liquidity of the market.
Jamie: [00:09:47] So specifically talking about hedge funds, 20, 25 years ago, they weren't as active in the fixed income world. I'm trying to think specifically about what drivers are forcing or meaning that more hedge funds are working in the credit world. Is it price transparency? And I'd love you to talk about pricing itself, because for someone like me who's more of an equities person, even pricing something as simple as pricing can seem a little murky in terms of how exactly you mark to market these bonds on a daily, hourly, minute by minute basis. And secondly, with liquidity, has this electronic trading just created more liquidity, as in enough liquidity for hedge funds to be more attracted to trading fixed income?
Rodérick Joniaux: [00:10:31] So clearly, I mean, what first of all, I find personally fascinating with hedge funds is how they've grown in every asset classes. If I look at 2020 against 2024, just to give you some number and some context, in 2020, which is the year of Covid, again, looking at government bonds, about 27% of our trading volume was from hedge funds between dealers and customers. In 2024, that share more than doubled. It was 55% last year of our trading volume was from a hedge fund. And that's true across all asset classes. Which I think is a significant increase. Obviously, we've seen at the same time the shares of other client types, such as central banks. When we went from the quantitative easing to the quantitative tightening, those shares naturally decreased. But still the hedge fund growth has been huge. And yeah, to your question as well on price and price discovery, I think that growth of hedge funds community on trading platforms and in fixed income in particular, as in my opinion, has had a positive impact on the price discovery and on the liquidity conditions.
Rodérick Joniaux: [00:11:42] The electronification of that workflow. We're here to help clients achieve economies of scale and to create more trades. We've had the electronification we have today, clients and hedge funds wouldn't be able to support the scale of the business. I want to talk about automation here, where a few years ago we started a trading protocol to automate the automated trades from the buy side, creating huge efficiency tools that you were able to send hundreds of trades in a few seconds. And clearly, we've seen a shift in the last few years from hedge fund and systematic hedge funds in particular on these tools to facilitate trading models to be able to create more strategies and to, to trade more and more. So, it's kind of a self-fulfilling protocols. And for us, these automated trades from the buy side are now 80% of the tickets in bonds, and at least that in ETF, for example.
Jamie: [00:12:35] And so, David, I wanted to turn it over to you. What kind of data are hedge funds consuming now? And maybe five, ten years ago. How is that changing?
David: [00:12:45] Yeah, I think also picking up on what you said earlier about the growth of hedge funds in the fixed income space. I think there have always been there to some extent, like I remember earlier in my career, I was so fascinated with market wizards series of books if you’ve ever read those, they’re a kind of bible in the markets and you read stories of whether it was Soros or Bruce Kovner during the 80s and 90s trading heavily in whether it was EGB’s around the ERM crisis or treasuries around the Plaza Accord. But I think the combination of more electronification with the rise of systematic funds has definitely driven this more structured approach to trading fixed income for hedge funds and to come back to your question about the data, what we're seeing is, is definitely a huge growth in the demand for real time and historical time series for whether it's corporate bonds, government bonds, interest rate swaps. And there's a variety of, of sources that those come from. And why do hedge funds need those? Quite simply to model their trading expectations, to mark their books at the end of the day, to help out risk departments who are trying to ensure that the fund doesn't take too big a footprint in a particular market or ensure that they're compliant with the risk limits at the end of every day. So, it's now increasingly at a lifeblood. I think, of a lot of these particularly systematic hedge funds.
Jamie: [00:14:27] And, David, what about execution? If I'm right, the different ways that that execution takes place, RFQs, click to trade, CTTs. How is that changing and evolving over time?
David: [00:14:38] Yeah. Well, let's again take a step back. These modes of execution didn't exist 15 or more years ago, like Tradeweb, for example, is over 20 years old now, I think. And I remember early in my career trading on Tradeweb, but it was it was rare at the time. And as Rod said earlier, this push for more regulation, transparency. Whether it's the Dodd-Frank act in the US and the rise of the CEPs or MiFID in Europe really accelerated electronic trading. And then it was a question of, okay, well how do you trade electronically. How does that differ from voice trading for example. And RFQ in particular has become often the dominant mode of trading in fixed income, whether it's government bonds or interest rate swaps or some credit. Quite simply, request for quote for those people who are not as familiar with it. And there's some different flavours to that. Then also limit central limit order books, which will be more familiar for people coming from the equity space where you do have almost like a lit market, as we say, where you can see the depth on the bids and offers on each side of the price. And it's almost like an exchange. It's not an exchange, but it's similar to an exchange. And I think those two protocols continue to be pretty much the dominant forms. Now, there's like we said earlier, there's some different flavours around there, whether it's trading at the end of the day or trading around a particular event. But I think those continue to be the two main electronic protocols that seem to appeal most widely.
Jamie: [00:16:16] When you talk about voice broking, obviously this is prices being quoted over the phone. Does that mean, ten, 15, five years ago it was more of a relationship business. If you were a certain client, you would get better pricing. And now that it's moved more electronically, that increases the transparency. You can't really give a better price to a certain client because of who they are. Can you just say a bit about those dynamics? Because I know in currencies, for example, that was a very relationship business. I remember that that, you know, that that kind of relationship happening. And I'm just wondering, as we've moved more electronic, has it become less of a relationship, personal business between client and sell side?
David: [00:16:59] I think overall, yes is probably the answer. It has become less a relationship business. However, we have to think about there's different segments in the market. We often in the in the business we talk about dealer to client or dealer to dealer. Let's think of those two segments for a second. And then within dealer to dealer for example, it's predominantly still a voice driven market in many fixed income instruments. And there's often a broker involved. Why is that? Well, generally the trade size tends to be a lot higher in dealer to dealer to dealer to client. The bigger you trade, the more information you're giving away effectively in that trade, the more sensitivity there is around the trade. The bigger the footprint you're leaving in the market, the potential to move the price in an instrument, especially if it's not very liquid. So, relationships are always going to be stronger and more needed in that area, because it's not as simple as just picking a price on a screen. In the dealer to client space, that that dynamic still exists, but there's a huge tail of clients who really trade generally smaller sized tickets relative to those bigger dealer to dealer clips. And as a result, there's less information leakage. There's less sensitivity around the trading price. There's less of a footprint in the market. And they naturally lend themselves very well to an electronic trading venue or frequent trading. So, I think it really depends on the instrument, the client type, the size of the ticket. One of the factors we're seeing in the trend of electronification is a decline in the average trading size, because it is encouraging more electronification if you're trading in smaller clips.
Jamie: [00:18:49] Rod, let's go back to when Tradeweb began. David was just saying he remembers trading on Tradeweb 20 years ago. So, how big a player was Tradeweb in the market then? Just to give us a sense of how big it is now and, for example, use the European government bond market as an example. And I notice you've made a few acquisitions over the years as well. So it'd be just good to know what the journey of Tradeweb has been to today.
Rodérick Joniaux: [00:19:16] You're really right, David. It's just over 20 years now, but Yeah. I mean, to take a step back, right? We've been, I guess, created in 1996. So, it's a while back. We actually launched our first electronic trading platform in the US in 1998 with the US Treasury markets. And then we opened a London office, and we created the first product traded electronically in Europe, which was European government bonds in October 2000. So, it's going to be 25 year anniversary in October 2025 this year. So, make sure to invite everyone. But yeah, it's so it's been a long journey. And since then, since we since we started, we obviously continued to innovate. We've been offering multilateral dealer to customer marketplace in the rates business. First of all, as we're talking here to institutional clients, to retail clients in the US as well. And that's across cash derivatives repos. And then we entered other asset classes like credits, corporates and emerging markets, even equities and ETFs, our big marketplace for us today. And we have also a dealer to dealer offering, as David was referring to under our dealer web umbrella. And we expanded geographically as well. So, we had offices in Asia, including in China, and then more recently in Australia. Jamie, you referred to an acquisition here with Yield Broker last year.
Rodérick Joniaux: [00:20:36] And also in the Middle East now. So, it's definitely been a been a journey. And I think it's important that, you know, we were created in 1996 so that when our founders were launching that company, they opted to use internet as the backbone of the, of the of the connectivity. And at the time, I mean, I was not really in the market yet, but at that time, I don't think the future of the internet was set in stone and certain. So, it was a leap of faith in some extent. And obviously it proved it proved successful. And then I would just add that, since then, since we started, obviously we've experienced all kind of market cycles. Obviously right now the environment is pretty volatile. And we witnessed the evolution of both the buy side and we're talking about hedge fund here, but also the sell side. And you know, yeah, I would say that our success along the years have really been led by clients as well becoming more sophisticated, investing in more technology and hedge fund is definitely the kind of, you know, clients that are doing that.
Jamie: [00:21:35] But what I did want to pick up on the how creative you can be in terms of types of trades. And we'll come on to that in a second. But you talk about your day to day now. Could you just give us an example of your day. And I think people would be interested to hear how you consume your news. What kind of news is important to you? When the day starts, the kind of conversations you're having with clients. I totally understand you can't go into specifics with certain clients, but the kind of conversations you're having now, because we are in a very fast moving market, a very volatile market. I read today that Trump can tweet up to 200 times in a day. I also read today that Trafigura are pitching to try and increase the trading hours of certain commodities, just so that markets can be open, that when Trump is tweeting. So, I'm just interested what your day’s like today, what kind of conversations you're having. How are your clients coping with this volatile world?
Rodérick Joniaux: [00:22:22] I mean I will start by saying that obviously we are mainly Tradeweb a dealer to customer secondary platform. So, we're not really involved in the primary markets when the bonds are being issued in my world. We hear from the grey market. So, when the bond is about to be issued to the secondary market. So, we are here to really as I said before, make sure clients, all our clients and that's hundreds of thousands of them and our market makers, which can be different type of firms these days can connect and can trade. So that's a big part of our day. Making sure that the connectivity is there, that our production environment works as it should. And given the fact that, as I said, we've got tens of products now on our platform, it's becoming more and more tricky. The growth I mentioned earlier about the growth in number of trades. If I compare again, 2020 against 2024, the number of trades executed in government bonds has more than doubled for us only in the last four years when we’re a 25 year old product. So really the growth has really accelerated. And that growth in tickets and in volume really doesn't come without any challenges, both for us for the buy side and for the sell side. So that's definitely one of the big parts. And when in terms of conversations that we have, obviously we as I said, we have a lot of ex market people. So, we are hoping that we understand the market pretty well.
Rodérick Joniaux: [00:23:52] We talk to buy side and sell side at the same time trying to again solve their pain points. And really what I would say is, different players on the buy side and sell side have different mandates, want to speak about different things. They've got different needs, which we're here to try to solve. And also, different pockets. We see very different degree of sophistication, even given within a given client segment. For example, hedge funds. So, there's actually an analogy I really like between technological innovation and evolution. Our head of international business showed a video in a conference a few years ago which was showing Ayrton Senna on the left of the screen, driving the Monaco Formula One track in 1990. So, a while back and Lewis Hamilton on the right side driving the same track in in 2019. And basically, that analogy showed that Senna’s head was wobbling the wheel was really hard to turn around. And clearly the car was moving a lot, clearly driving a pure race car. And on the right side, Hamilton's was super stable. The car was not moving, and he was even going even faster. So, he was driving a car, but also a computer with a ton of buttons on the wheel. So that really showed the technology advancement. And how is that evolved over the last few years and how not only drivers, but traders on the buy side and sell side are in completely different new roles than they were a few years ago as well.
Jamie: [00:25:18] I like the idea of Tradeweb being analogous to Lewis Hamilton's car. It's just the perfect machine to get yourself around the course. Rod, one more question to you on the kind of information requests you get from hedge fund clients. Do they want raw data sets? Do they want the raw numbers so that they can go away and do their own analysis about what's moving in the market, or do they want you to basically opine and produce research based on the data you're seeing? What's more preferential for them?
Rodérick Joniaux: [00:25:49] Yeah, I think that's a good question. I would say probably the former. Hedge funds, as I said, they've got a lot of technology means on their side so they can analyse data. They have a lot of people. We've seen a big move from the sell side traders to the to the buy side and hedge funds in particular in the last few years. So, I would say more in terms of raw data. But again, we don't really dictate the client’s needs or what they want to do. We're here to really listen to try to develop solutions and data sets that that could fit them. So maybe to go above and beyond the, the just execution platform that, that we wear and that we still are. So, in terms of, you know, data and what they're asking for to David's point earlier, I would mention, first of all, for me, the importance of reference data. You know, we've seen Tradeweb and LSEG partner together a few years ago to create some data sets, namely the Tradeweb FTSE closing prices for UK government bonds. Basically, in 2017, the debt management office in the UK decided to choose a third party to create closing prices.
Rodérick Joniaux: [00:26:55] And we won that tender with FTSE Russell. And those prices are important data set in the market and for hedge fund as well. We were not only now in the guilts market but in treasury space, in the government bond space in Europe as well. And they play a role in the index construction. They play a role in the trade at close and managing portfolios as well. So, it's definitely something they're asking for and our clients are asking for as well. The second thing on the data and on your question, I would mention the importance of pre-trade data. So, clients are using dealers’ streams dealer access that they show on the screen to choose which banks should I select now. What should I do now. So, they really look at the pre-trade data and details, whether on the screens itself or via our automated trading tools as well automatically. So yeah, I would say that clearly, it's pretty clear for everyone that clients are increasingly data driven. They use data to direct their trades to, to drive the execution. And really, for us, Tradeweb, the idea is now to really help them understand what they should do and when and how they should do it really.
Jamie: [00:28:02] And David over to you talking about the climate for hedge funds today. Is it getting harder to make money in this world of greater regulation and more transparency. How much more creative do hedge funds need to be? If you could talk a little bit about that.
David: [00:28:16] Yeah, I think it definitely is harder than ever. I think the minimum investment required to compete in the hedge fund businesses is as high as it's ever been. I think if you cast your mind back 20, 30, 40 years ago, it was unusual to find these individuals who were talented at trading. But if you did, they just needed a broker to execute. And off they off they went. Nowadays, I think there's generally a team of quants backing up a lot of the portfolio managers on the buy side and the hedge funds in particular. They want to be confident in their own data. They're often ingesting their own bespoke data from the dealers that they speak to, gathering that, crunching it, doing their own analysis, also taking data from data providers such as LSEG or Tradeweb as well. So, I think that bar is harder than it's ever been. And I think the speed at which the markets trade and this push towards making all markets now, it seems, want to move towards a 24 hour, 23 hour model similar to what several futures markets did many, many years ago. That push as well is making it more competitive than ever. Because to stay on top of the news cycle, you've got to move more quickly. You've got to be able to arrange and organise data more efficiently. Again, the days when you could just read through the FT or some key research and be good to go, like that's not good enough anymore. You really need to have a, a much more automated handle on things because it's not possible, just as a human to consume all the necessary data points, you need it summarised for you in some form of tools. And that's why I think we're seeing such popularity in whether it's trade cost analytics augmentation tools to summarise and present back to key findings from data or on the education side, like so much investment in quants in particular.
Jamie: [00:30:24] So if the edge now is just digesting information, large quantities of information faster than others, is the role of AI just more important? I mean, it's obviously a huge influence on all of our lives, but is it becoming an increasingly more influential topic in the world that you see? And I'm thinking of people who want to go into this into this industry, you know, do you need to have economic analysis as a strength? Do you need to just be a mathematician? Do you need to be an AI genius? What are the qualities that people need to have to succeed in this world nowadays?
David: [00:30:58] I think there's what skills does one need and what technical skills. And there's no question that having technical skills in whether it's maths or of course, there are now AI degrees and diplomas that you can do or statistical modelling. There's no question that that is an advantage. And many of the banks and the hedge funds in particular are looking for that. I do think the longer you want to stay in a career, you need to be intrinsically interested in what you're doing. So simply just learning these skills and thinking that that's going to translate into success or durability in the job. And I think experience teaches you. I think for me and rod as well, I can we talked about it earlier. It was an interest in the markets and an interest in what was going on, trying to understand or anticipate. And the world is very interesting nowadays when you look at what's going on with tariffs in particular, that's something we haven't really encountered much for several decades. So, I think, yes, there's a technical side, which I spoke to earlier, but I do think it's also very important to have a hunger and a passion for what you're doing. And if you're going into markets, I think that does come back to understanding what's happening, the context for things. For me at least, it was always fascinating to see these global events played out through crisis. So, whether it was bond yields or stock prices or currency movements or commodity changes, to see these geopolitical evolutions going on, and you could observe a price and say, well, maybe it wasn't a one for one relationship, but there's a causal relationship there, which is quite fascinating.
Jamie: [00:32:47] And a question to both of you about the direction that hedge funds today are going in. There seems to be an increasingly large hunt for talent, or at least a competition for talent right now. I mean, every hedge fund out there is looking for people with, with track records. But the big guns, the Millennium's, the Citadels, the Point 72s, seem to be getting bigger. Are we getting the haves and the have nots? Are the bigger hedge funds just going to keep getting bigger? And is it the smaller hedge funds just going to basically fall away or is it easy to start a hedge fund now. Is now the worst time to start a hedge fund? What do you feel about the dynamic of the hedge fund world?
David: [00:33:29] I think it goes back to the point I made earlier, Jamie, I think it's challenging to get into that business because there's a high bar in terms of data, research, manpower, brain power. And there's no question that there's some exceptionally talented people out there who, through their own insights or hard work, can make a difference. But I think when you look at some of the larger funds that you mentioned earlier, it goes to show that that infrastructure is necessary. And I don't think it's just in the hedge fund industry that you see that. I think it's in many industries that to be an upstart in, I think there's no question there's maybe room for upstarts in certain niche areas of the market. But, our topic today is government bonds. And I think in that business size does matter.
Rodérick Joniaux: [00:34:23] I mean I completely agree with what David said. I would say that, obviously there's a lot of hedge funds these days. There's also a lot of hedge funds, as you said, getting bigger. They're getting across the globe as well, with the names we mentioned have branches everywhere, whether it's in the US and Europe, in the Middle East and so on. So definitely these hedge funds that have more resources, whether it's financial resources or technical resources and technology resources have clearly an edge. And we see that in terms of trading volume, in terms of type of protocols that they can use in terms of data they can consume. So definitely, however, I see clearly a need for niche players as well in the future. There are key players in the market. Hedge funds, as we said. Some of them have risk capacity to replace, maybe the lower risk capacity of banks these days. And I think, they are for me their ability to support the primary markets in addition to the secondary market is key. We see the government bond kind of issuance these days. It's very large. It's still set to increase, as we saw with the news recently. So these clients, whether smaller hedge funds or larger hedge funds, like the systematic hedge funds, for example, they can, for me at least, act as a type of liquidity providers, not really markets making markets, you know, in their own, but by sending so many trades automated for most of them across each curves, each asset in both directions all day long. These type of liquidity for me is here to stay from either the names you mentioned or smaller hedge funds as well.
Jamie: [00:35:57] Well guys, this has been such an interesting discussion. Thank you so much. I was going to ask you a pop question that for anyone out there who's looking to buy a house, you want to give us an outlook on your rates for the rest of the year? Don't worry. I'm not going to I'm not going to quote you on it.
David: [00:36:09] Yeah, I think. I think the chance of rates going a lot higher from here isn't that much of a concern for me because I think the kind of structural trend and inflation seems to be going lower. The uncertainty being generated by the US administration around policy, it's harder and harder for businesses to plan. I think that's creating a bit of a softer economic outlook. So yeah, I think in the next 3 to 6 months I see rates where they are or lower. So probably not a bad time to be to be on the hunt for a mortgage.
Jamie: [00:36:44] Nicely played. Rod, do you want to proffer an answer?.
Rodérick Joniaux: [00:36:49] Yeah. I mean, I would love to know what the future holds. I'll be able to, to do something about it, but Yeah, I mean, I've got the same view of David, I think probably of most players in the market as well. Rates are probably here to stay around here and lower from the time onwards. Personally, I would love to overpay my mortgage as much as possible still, but I think the rates are probably around here and slightly lower for the rest of the year. The uncertainty is there. The volatility is there, which is sometimes it's good, but sometimes it's bad volatility. But yeah, the rest of the year is going to be very interesting. And maybe you can invite us back to, to discuss in more detail.
Jamie: [00:37:26] Well, that would be an absolute pleasure. Rod, congratulations with everything at Tradeweb. It seems like things are going great. Thank you for coming on board, David, always a pleasure. I know you guys are on LinkedIn or various websites. If people want to want to get in touch and ask any questions. But for me, I wanted to say thank you to you both. This was great fun. And as you say, Rod, we're great to have you back on again and see where we're at.
Rodérick Joniaux: [00:37:51] Thank you, Jamie.
David: [00:37:52] Thank you. Jamie.
Jamie: [00:37:53] Thanks so much, guys. Take care.
WORSPACE ADVERT: [00:37:54]
Jamie: [00:38:06] Thanks once again for listening, everyone. And please, as usual, give us a follow like or subscribe wherever you get your podcasts. The information contained in this podcast does not constitute a recommendation from any LSEG entity to the listener. The views expressed in this podcast are not necessarily those of LSEG, and LSEG is not providing any investment financial, economic, legal, accounting or tax advice or recommendations in this podcast. Neither LSEG nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast, and any and all liability therefor, whether direct or indirect, is expressly disclaimed. For further information, visit the show notes of this podcast or lseg.com
