Monthly Securities Finance Market Review: March 2024

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

March is historically a strong month for the securities lending industry. Marking the end of the first quarter, the end of the Japanese fiscal year, containing both a U.S. Federal Reserve Bank Governor’s meeting and a triple witching options expiry date, March featured a number of opportunities to drive lending activity for the markets to fluctuate. March 2024 saw 2,290,210 trades executed equal to $2.53 trillion over EquiLend NGT. Throughout the month we observed significant strength in trading activity that grew as the month progressed. Volumes returned to 2023 averages with a few spikes approaching all-time highs.

Fixed income was a tremendous bright spot. U.S. (+17%), EMEA (+41%) and APAC (+52%) were all up double digits as compared to March 2023 on the back of investment grade corporate debt demand driven by expectations of fewer than previously expected Fed rate cuts. Daily trade counts reached a new high on March 25 with 43,842 fixed-income trades. This was surpassed on April 2 and then again on April 3 as we hit 46,284 fixed income contracts executed. April 3 also represented the second-highest total trade count for NGT to date, with 143,122 trades printed.

By the last week of the month, NGT averaged 122,101 trades a day, representing a 3% gain over the same period in 2023. While volatility, as measured by the VIX, was relatively low throughout the month, the steady run-up in U.S. indices (+30% over the last year), combined with revisions in U.S. rate cut predictions fueled an increase in short activity and ultimately a 20% rise in volatility through the first week of April. If this trend continues, April should result in a strong month for trading activity.