Emerging Technologies Set to Change the Fixed-Income Market

As the stock market continues to make record highs, the infusion of robotics and artificial intelligence in the bond market is giving the fixed-income space its own renaissance as more emerging technologies are changing the landscape of the industry.

A recent Forbes article highlighted the bout of changes happening in the fixed-income arena, such as more reliance on machine learning, automation and algorithms. Adopting this technology can allow for better liquidity and enhanced speed when it comes to identifying trends within the bond market.

“After having experienced both the sell-side and the buy-side as a bond trader, it was clear to me that asset managers needed a more resilient market structure with more independent avenues to access liquidity, especially with reduced capital commitment and risk-taking by traditional intermediaries,” explains Constantinos Antoniades, the Head of Fixed-Income at Liquidnet. “Equally important, asset managers until relatively recently had no tools to access liquidity directly from their peers for a better implementation of their investment strategies.”

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Other breakthroughs with the incorporation of these emerging technologies include the ability to forecast the performance of a set of bonds via indexing. Machine learning technology can extrapolate news data and determine whether a story is positive or negative, giving bond traders market research to make trading decisions.