Trading Volume Is Rising and Depth Is Improving in the Treasury Market
- Trading volume has increased over past six months, JPM says
- Market depth has been more resilient to rising volatility
The world’s biggest debt market just keeps getting bigger, and its growth this year has come along with rising trading volumes and improving measures of depth.
In their latest litmus test on the structure of the $15 trillion U.S. Treasury market, strategists at JPMorgan Chase & Co. found that over the last couple of years the market has reversed a declining trend that had started in 2011. Trading volume increased to average $556 billion a day in 2018 from an average of $502 billion in 2017, a team including Jay Barry said in a note. At its trough in 2015, volume averaged about $480 billion. The ability to trade without substantially moving prices, known as market depth, has also improved and is holding more than 20 percent above its long-term averages.