Monthly Securities Finance Market Review:
July 2024

EquiLend’s Head of Trading Solutions, Mike Norwood, shares his monthly market review for securities finance, highlighting July trends and some highs seen across NGT. The following data has been measured and derived from EquiLend NGT.

Trading by Sector for July: The Global Picture

Starting and ending with a flourish, July saw 2,825,390 trades agreed, versus $2.7 trillion on EquiLend’s NGT platform. This figure represents +12% over June 2024 and +20% from July 2023 as both equities and fixed income saw increased demand at +13% and +38%, respectively. Following a new all-time daily high total trade count of 157,562 set on July 1 and resulting from index reconstitution activity, the remainder of the month saw relatively stable trading activity. Equity markets were flat until the last few days of the month as recessionary fears on the back of U.S. economic data started to impact market sentiment, resulting in a sudden sell-off.

The tech sector was in demand as earnings failed to impress investors, and they looked for small-cap names more likely to gain if the U.S. Federal Reserve cuts rates as expected, beginning in September. With reduced inflation readings and a cooling job market, markets are now pricing in two to three cuts over the balance of the year.

Fixed income remained in demand even as U.S. Treasurys (UST) gained 2.2% over the month around rate cut expectations. USTs saw 26% more activity on NGT year over year. APAC sovereign debt witnessed a 32% jump in trading activity as the Bank of Japan hiked interest rates and reduced purchases of Japanese Government Bonds. In the credit space, investment grade continues to represent the lion’s share of activity and was up 11% over July 2023.

Eyes will be on macro conditions in August as recessionary fears in the U.S. and the global market response will be front of mind after this week’s sell-off.