The importance of high-quality OTC data in navigating inflationary uncertainty

Continued uncertainty around inflation means high-quality OTC data has never been more vital in fixed income markets.

The continued uncertainty around inflation is not easy for organisations to navigate. That September’s small dip in UK inflation, from 6.8% to 6.7%, came as a surprise to most economists demonstrates the difficulty in predicting its direction of travel. In this climate, the implications for organisations in not routinely sourcing the correct data can be disastrous for their trading and investment strategies. It is imperative to have detailed and transparent insights into global bond pricing data, particularly during this critical period of credit market volatility, to be able to make informed investment and risk management decisions.

Inflation has a major impact on fixed income investments and bond price volatility, and the effects can be felt along the entire yield curve. Against such a backdrop, access to executable pricing data throughout the trading day, for both sell-side and buy-side institutions, becomes a necessity to make the most informed trading and risk management decisions.

High-quality and bespoke historical trade data, such as that provided by TraditionData, stands as a vital asset for managers formulating and validating their strategies, with a view to maximising the potential for successful trades. True price discovery requires an understanding of current market conditions combined with their historical analysis and data. This forms the foundation to successful trading and leads to better execution and stronger risk management.

Certainly, recent updates from North America and Europe point to a slow-down, if not yet a halt, in inflation’s continued ascent. Central banks across the western hemisphere are also seemingly approaching the end of what has been a seemingly eternal series of rate raises. Access to high-quality data gives investors and managers greater transparency and market visibility heading into 2024, so crucial given the current volatility of the global economy.

There remains a consistent demand for high-quality, accurate, bespoke data, in a marketplace where notable successes can be determined by fine margins. As such, compiling the right data becomes essential, with data on historical trends, current market movements and economic indicators acting as potent weapons in navigating inflationary uncertainty.

At TraditionData we provide data for opaque, esoteric emerging bond markets as well as for developed markets around the world. A good illustration is the launch of our new Japanese Government Bond (JGB) data product, earlier this year, which provides market data and access to all issues across the JGB yield curve, as well as Derivium Tradition, which provides data for Indian Rupee (INR) denominated Fixed Income in addition to Foreign Exchange and Rates data.

In addition to this, our clients now have access to one of the most reputable and accurate data sources anywhere in the global credit markets. The strength and depth of the high-quality OTC data that TraditionData offers its clients has been further reinforced following its acquisition of bonds.com, bringing an additional 20,000+ bonds, across 55+ countries to our data coverage. Of immediate benefit to clients is access to our pre-trade data on thousands of Treasury, corporate and sovereign bonds, and access to real time, hourly snap and end of day data, with market depth and all associated volumes.

TraditionData offers a reliable, timely, and credible alternative to the prevalent aggregate-based data packages, making it an invaluable resource for risk teams and managers navigating the effects of increased fixed income volatility. The company’s credit and fixed income solutions cover the Americas, Europe, and the Asia Pacific, supported by analytics teams and desks worldwide, leaving TraditionData well positioned to deliver comprehensive fixed income data solutions. This equips clients with both the increased confidence to integrate these solutions into their portfolio and strategic analytics, and the peace of mind that real-time, transparent, and high- quality OTC data will help them mitigate any effects of inflationary uncertainty.

Featured Product

Global Fixed Income Data | Bonds.com

From Tradition’s Global Fixed Income Business, you now have access to bonds.com data, one of the most accurate data sources available in the credit markets.

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