Trading Fixed Income Bonds with CMC

23 Nov 2021, 20:00

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Trading Fixed Income Bonds with CMC

Fixed income products have been an integral part of the CMC Markets product suite for more than twenty-five years. Back in the 1990’s, aggressive interest rate management by central banks made this an appealing asset class for many looking to trade on a short-term basis, but after more than a decade of consistently ultra-lax monetary policy, the lack of volatility here pushed treasuries from favour with this cohort. Regardless, throughout this period, the CFD has continued to offer institutional clients a convenient solution for managing their sovereign debt exposure – something that many see almost as a necessary evil, especially given the fact so many portfolio managers demand a meaningful proportion of any balanced fund is held in high-grade debt instruments.  

However, it seems likely that the market is now poised for something of renaissance, with two key factors coming into play. The primary driver is set to be the fact that globally, Central Banks are now taking a more activist approach in terms of managing monetary policy. This presents more diverse views over the timing of interest rate hikes, resulting in heightened levels of volatility, especially around key central bank announcements. Short term traders see opportunity whilst those invested for the longer term have a corresponding need to manage portfolio risk.  

There’s also a growing awareness of trading bonds in the broader retail market, especially in the UK. Investing in fixed income products is arguably more common in many other jurisdictions, but structural reform does seem to be afoot, part of which at least has been catalysed by Brexit. As a result, awareness of the asset class is poised to increase sharply, leaving brokers who can provide access to fixed income markets as part of a comprehensive product offering at a natural advantage.  

CMC Markets Connect currently offers access to 55 different sovereign bonds of assorted expiries, covering major markets including the US, UK, Germany, Japan and the Eurozone. In addition, a smaller number of more esoteric instruments are also accessible, such as the French-issued Euro OAT and the Italian Euro BTP, providing additional pairs trading opportunities for those looking to trade off the delta between national and supranational outcomes. 

Institutional counterparties can access fixed income products from CMC Markets Connect over the usual channels. Feeds can be delivered through the FIX API or offered as part of our comprehensive white-label platform. The same fully configurable reporting tools are available as is the case with FX, Indices and Commodities, whilst cross-margining is also part of the multi-asset proposition. 

 For further details on how institutional counterparties can augment their tradable universe by including fixed income products, contact the CMC Markets Connect team at connect@cmcmarkets.com 

CMC Fixed Income product set:

Canada 3 Month Dec '21 3 Month Mar '22 10 Year Dec '21 10 Year Mar '21    
Euribor Cash Dec '21 Mar '22 June '22 Sept '22 Dec '22
Euro Bobl Cash Dec '21 Mar '22      
Euro BTP Dec '21 Mar '22 3 Year Dec '21      
Euro Bund Cash Dec '21        
Euro Buxl Cash Dec '21        
Euro OAT Dec '21 Mar '22        
Euro Schatz Cash Dec '21        
Eurodollar Cash Dec '21 Mar '22 June '22 Sept '22 Dec '22
Japan JGB Dec '21 Mar '22        
UK Gilt Cash Dec '21 Mar '22      
UK Short Stg Cash Dec '21 Mar '22 June '22 Sept '22 Dec '22
US T-Bond Cash Dec '21 Mar '22      
US T-bond U Dec '21 Mar '22        
US T-note 10y Dec '21 Mar '22        
US T-note 2yr Cash Dec '21 Mar '22      
US T-note 5yr Cash Dec '21 Mar '22      

 

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