European Corporate Bond Trades Grow in Size Amid Rising Market Dynamics
London, Friday, 8 August 2025.
Since 2023, the European corporate bond market has seen average trade sizes increase significantly, impacting liquidity and trading efficiency. This reflects a shift towards larger, automated trades.
Dynamics Shaping the Growth of Trade Sizes
Since 2023, average trade sizes in the European corporate bond market have surged. Data shows the average size in the investment grade bond market escalated 15% year-on-year to reach €719,000 by mid-2025, marking a 28% rise from €560,000 in early 2023. The high yield bond market exhibited a more significant rise, with average trade sizes jumping 20% year-on-year to €808,000, reflecting a 46% increase from €553,000 two years prior [1].
Market Implications and Strategic Shifts
The shift to larger trade sizes signals profound changes in liquidity and trading strategies across the European market. This rise in trade sizes is largely attributed to advancements in electronic trading protocols such as automation and portfolio trading. Gareth Coltman of MarketAxess highlighted automation as the fastest-growing trading protocol, accelerating the shift from traditional request-for-quote (RFQ) systems to more dynamic automated trading models [1]. Zornitsa Todorova of Barclays mentioned record-high portfolio trading volumes of €35 billion in March and April 2025, predominantly driven by euro-denominated investment grade bonds [1].
Technological Drivers and Future Projections
Electronic trading efficiencies and automation tools are central to these changes. Liane Fahey from Tradeweb noted how automated trades have shown increased average ticket sizes, reflecting a broad adaptation toward technology-driven trading efficiencies [1]. Furthermore, Tradeweb’s platforms have seen stability in credit liquidity despite market volatilities, reinforcing the benefits of these technological advancements in trading process integrations [2].
Strategic Innovations and Future Outlook
Looking ahead, strategic innovations like the introduction of consolidated tapes in Europe and the UK by 2026 are set to further reshape the market. Increased transparency is expected to lead to smaller trade sizes, more frequent trades, and the development of midpoint auction protocols, potentially bringing more retail-focused activities and diverse market participation, according to Chris Murphy, CEO of Ediphy [1]. This evolving landscape denotes a clear trajectory toward enhanced market efficiencies and participation, making it essential for market actors to adapt to these technological and strategic shifts [1].