Credit markets in August have characterised by high levels of issuance and poor levels of secondary market liquidity. Digesting enormous new flows, with the Federal Reserve buying very little and de-risking in the markets is all having a massive impact. With expectations on new issues blown through already, September is looking ominous.
With such huge supply, it will be critical that new initiatives to automate primary market processes are in play as soon as possible, says Jim Switzer, global head of fixed income trading at Alliance Bernstein. At the same time, asset managers that are unable to trade efficiently and electronically in the secondary markets will struggle in this environment