Just like me, they love to be close to real time. And like me, you may love things that are close to real time, too—or more likely, if you work in the data industry, at real time or even at low latency—in which case you may well be aware that our website moved to an “online-first” model earlier this year, giving us the ability to post news as it breaks in near-real time, along with our stablemates from other WatersTechnology brands.
You may even be aware that we’re generally posting several items—from news briefs to full, exclusive stories—over the course of each day, to make the site more valuable to readers in the data industry. Of course, we’re never going to be updating with the frequency of the full-scale newswires that you’re often tasked with rolling out to users on trading floors, but we can now definitely deliver news in a more timely manner.
In that sense, we’re much like the fixed income markets, which—as new capabilities emerge, and as participants and regulators press for more transparency—are moving inexorably to a more real-time model for data, even for markets and instruments that don’t necessarily move at the same pace as the most liquid treasury markets.
Of course, it’s typically these illiquid assets that don’t trade so regularly that prove hardest to put an accurate value on—as anyone trading bonds during the credit crunch will recall—and therefore present the most risk of gaining or losing value before your valuation adjusts at the end of the trading day. We’ve already seen vendors like Benchmark Solutions and SuperDerivatives with long and impressive (in Benchmark’s case, in terms of its founding staff) pedigrees create real-time pricing services covering a swathe of assets, and now these are joined by a new Canadian startup called iPerform Data, which offers prices for fixed income instruments, updated at 20-minute intervals—not just once at the end of day, or a few intraday price snapshots—starting with Canadian bonds before ultimately expanding to cover US and European assets.
iPerform chief executive Robert Perez says it will take a couple more years for the vendor to fulfill that aim. And by then, don’t expect these vendors to be alone: Moving to real-time pricing—as models and tools become more accurate and more sophisticated—is a natural evolution for the fixed income markets, but it’s also a necessity if the markets are to achieve more transparency to avoid a repeat of the credit crunch, and this data will become a necessity for vendors to offer their clients.
In fact, it will be “vital” for bond trading platforms and vendors to deliver innovative products, to meet anticipated future demand, says Simon Linwood, data manager at European fixed income trading platform operator MTS—which already offers a low-latency, tick-by-tick feed of fixed income data dubbed MTS Live—in a Q&A in this issue. And other participants in Inside Market Data’s recent Fixed Income special report also expect demand for fixed income data—particularly pricing and evaluations—to increase, along with demand for transparency into the data itself, its quality, and how it was arrived at.
In addition, participants in the report—which you can download from the special reports section of our website—expect the amount of data generated to increase exponentially in the near future as more trading moves from the over-the-counter markets onto more transparent exchange-like venues. Much of this shift is being driven by regulators concerned that the OTC markets cannot provide the required levels of transparency. Ironically, these are the same regulators currently investigating the practice of high-frequency trading, which may well become adopted in fixed income markets more rapidly as a direct result of moving liquidity onto exchanges. But that, too, is a natural evolution. Have liquidity, will trade. Have faster data, will trade faster. And have more timely news… I think you get the idea.
Dan DeFrancesco makes his return to the podcast to talk about bitcoin futures and why he wanted to start this podcast in the first place.Subscribe to Weekly Wrap emails