Monthly Securities Finance Market Review:
June 2024

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

Trading by Sector for June: The Global Picture

June saw 2,528,964 trades agreed, equal to $2.86 trillion, and closed out a record quarter for securities lending trade volumes across EquiLend’s NGT platform (7.9m trades versus $8.4 trillion). The June figures represent a 7% decrease compared to May 2024 and a 1% decrease from June 2023 while volatility remained subdued as core inflation cooled and markets closed out the first half with continued highs. Q2 2024 was relatively active, with trade volumes up 9% year over year on flat equity performance but a 36% rise in fixed income execution as corporates (+37%) and sovereign issues (+30%) continued to be in demand.

June witnessed increasing volatility in Europe as concerns around elections in France and the UK weighed on investors while the ECB and Swiss National Bank cut rates by 25 bps on improving economic conditions. We observed an uptick in demand for EMEA names, with daily average trading volumes up 12% for equities and 9% for fixed income month over month. The 1.3 million trades executed in Q2 represent a 19% increase year over year.

Fixed income demand slowed in June as yields dropped and prices increased. The U.S. and EMEA fixed income space saw reduced volumes of –10% and –6%, respectively. Inflation shows signs of easing, with the 2% target hit in the UK and markets beginning to price in two and maybe three U.S. fed rate cuts for the remainder of the year.

The second half should be interesting as markets respond to the UK and French election results and the ongoing U.S. presidential race. Eyes continue to be on inflation and the geopolitical situation, and with indices registering gains YTD so far, there could be an opportunity for increased volatility.