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Tradeweb Integrates Repo and Interest Rate Swap Trading, Enhancing Client Workflows

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Tradeweb Markets Inc, the global operator of electronic marketplaces for rates, credit, equities, and money markets, has launched new features integrating its repurchase agreements (repo) and interest rate swap (IRS) product offerings, in what the company claims is an industry first. The enhancement aims to improve clients’ execution workflows across both markets.

“This integration has two key aspects,” says Nicola Danese, Co-Head of International Developed Markets at Tradeweb, in conversation with TradingTech Insight. “First, we use Tradeweb’s liquidity pools to execute the two trades: the repo and the swap. Second, we enhance price discovery by utilising information from our swaps platform to inform pricing on our repo platform.”

In response to higher money market volatility driven by shifting central bank policy expectations, traders increasingly reference spreads to overnight index swap (OIS) curves when pricing fixed-rate repos. Tradeweb claims to be the first electronic trading platform to offer OIS curves during the repo trade negotiation process, aiding institutional clients in assessing the price competitiveness of repo rates across various currencies and maturities. These OIS spreads will be available for all GBP, EUR, and USD trades on the Tradeweb repo platform, reflecting the exact term of each repo trade by leveraging swap curves from the IRS platform.

Following the execution of long-dated fixed-rate repo transactions on Tradeweb, buy-side traders can now manage their interest rate exposure electronically, achieving straight-through processing and reducing operational risk. They can pre-populate a corresponding OIS ticket with details of their completed repo trade and send a request-for-quote enquiry to Tradeweb’s network of liquidity providers on its IRS platform with a single click.

“There are two use cases here,” explains Danese. “The first is where you’re using our repo platform to execute (for example) a 3-month fixed rate repo trade to lock in funding, but you don’t want the 3-month interest rate risk associated with that. You can now automatically generate a 3-month swap ticket, pre-configured with the repo cash proceeds and the tenor start and end dates. The integration leverages the information from our repo platform to automatically create the swap ticket and send out a Request for Quote (RFQ) on the IRS platform.

“The second use case is slightly different,” he continues. “If a client initiates a repo RFQ on the repo platform because they are seeking funding across different lines and maturities, the quoted fixed repo rates might not provide a complete picture for the trader, and a reference swap rate should be considered. This integration brings swap rates from our IRS platform into the repo negotiation. The swap curve is bootstrapped to calculate an interpolated rate for the repo transaction, providing a measure of the cheapness or expensiveness of the repo funding rate versus the €STR or SONIA curves, for example.”

By linking its repo and swaps platforms in this way, Tradeweb seeks to transform what have traditionally been manual, disconnected, and time-consuming processes into efficient, digital workflows.

“This is all about leveraging Tradeweb’s unique advantage: our various pools of liquidity, which benefit both the execution workflow and price discovery,” says Danese. “Firstly, we use these liquidity pools to link the execution of two trades: the repo and the swap. Secondly, the information from our swaps platform becomes relevant for pricing on the repo platform. This approach aligns with our multi-asset platform strategy, enabling more efficient trading of these different instruments.”

Tradeweb’s platform supports trading repos across 24 currencies, providing institutional clients access to liquidity from 47 dealers globally. The platform averages 3,300 trades and over $340 billion in notional trading volume daily. Additionally, Tradeweb’s IRS marketplace, established in 2005, enhances transparency in swaps trading and operates regulated electronic swaps platforms worldwide, averaging over $790 billion in daily notional traded volume with liquidity from more than 50 dealers.

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