Tradeweb and LSEG's FXall launch local currency Emerging Markets trading workflow

August 08, 2023 - Tradeweb in partnership with FXall - LSEG’s electronic platform for global currency products, unveiled a state-of-the-art solution designed to streamline trading in Emerging Markets (EM) products. The FX Swap Workflow solution integrates trading workflows in local currency EM bonds and FX swaps into a unified user interface.

This new solution empowers mutual clients of both Tradeweb and FXall to purchase or liquidate an EM bond using the Request-for-Quote (RFQ) or Request-for-Market (RFM) protocols available on Tradeweb. Following this, clients can efficiently hedge the associated local currency risk by executing an FX swap trade, directly connected to FXall. The system is crafted to ensure clients can solicit prices from a multitude of dealers concurrently for both segments of the transaction. This enables enhanced real-time transparency and ensures optimal execution. Additionally, clients stand to benefit from existing straight-through-processing (STP) pathways, culminating in enhanced automation and time efficiency.

Enrico Bruni, Head of Europe and Asia Business at Tradeweb, emphasised the value of the initiative, stating, "Facilitating the connection of our EM bond marketplace with FXall’s liquidity pool provides buy-side traders with access to enhanced and efficient local currency EM trading workflows. Clients trading EM products can now take advantage of markets that are increasingly interlinked, while also benefitting from seamless execution and STP. This latest innovation underpins our commitment to creating solutions that cater to the needs of our EM clients, and help them move risk more efficiently."

Neill Penney, LSEG's Group Head of FX, also commented on the collaboration, highlighting the evolution from traditional voice-based processes or fragmented workflows to a consolidated solution, "We are excited to provide our customers with an enhanced multi-asset integrated workflow, replacing what used to be either a voice-based process or a sequence of workflows split between different trading desks. Greater collaboration between LSEG and Tradeweb has enabled us to offer our mutual clients an effective solution in FX Swap Workflow, with all the inherent advantages of electronic trading and our world-class liquidity pools."

Morgan Stanley acted as the liquidity provider for the first transaction using Tradeweb’s FX Swap Workflow solution. Commenting on the transaction, Volkan Dikmen, Managing Director at Morgan Stanley, said, “We are supportive of new initiatives that help markets evolve and become more streamlined, so we are proud to provide liquidity for the first-ever trade bringing together EM bond and FX swap markets.”

Tradeweb offers global EM cross-product execution with comprehensive solutions across both bond and derivatives markets. Product scope includes EM IRS, CNY IRS via Swap Connect, hard and local currency bonds, portfolio trading for EM hard currency, EM credit derivatives, and CNY cash bonds via Bond Connect and CIBM Direct. More than 50 liquidity providers are currently supporting hard currency Asia, CEEMEA and LATAM bonds, many of which are also sending pre-trade streams and axes to facilitate smart dealer selection. Clients are able to trade EM bonds across 21 local currencies, with 11 more in the pipeline.

FXall is a leading electronic trading platform for global currency products. FXall is part of LSEG (London Stock Exchange Group), which is the majority stockholder of Tradeweb Markets.