Named Smart Markets, the new service will transform Euroclear’s data into interpretable insights to detect market movements, enhance trading models and build informed strategies.

Smart Markets was developed to meet demand from institutions – including banks, central banks and buy-side trading firms – seeking sophisticated data-driven insights.

“By harnessing the scale and depth of Euroclear’s post-trade ecosystem, which in 2023 settled the equivalent of more than one quadrillion of securities transactions, Smart Markets is able to provide trading firms with a true picture of fixed income activity including government and corporate bond markets,” said Philippe Laurensy, managing director and head of product, strategy and innovation at Euroclear.

“As a financial market infrastructure with a track record of providing high quality settlement services to the world’s leading financial institutions, we are well positioned to drive innovation in the industry and to improve efficiency in the market as a whole.”

Demand for market data from financial institutions continues to rise, and with that, data quality and the ability to interpret large volumes of data has become key.

Smart Markets brings together raw data from market sources including Euroclear, which is then enriched, normalised and analysed automatically.

This enables users to improve their investment and research intelligence, alongside improving post-trade analysis and reporting.

“Mosaic has been at the leading edge of data analytics for capital markets since our inception, and the launch of Smart Markets takes our offering to the next level, introducing a new category of data product,” said Matthew Hodgson, chief executive and founder of Mosaic Smart Data.

“Leveraging comprehensive, high quality transaction data from best-in-class providers such as Euroclear and running it through our proven models gives participants the insights at their fingertips to truly understand market behaviour and make more informed trading decisions.”

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As a child of the eighties, it’s difficult to express the magnitude of joy that the arrival of the video recorder brought to a kid’s life back then.  For me, no toy could match the excitement of pushing that big clunky cassette into the slot, and then feasting my eyes on what became displayed on the modestly sized TV screen.   

The Rocky franchise was my favourite and the scene which sticks in the memory is when Clubber Lang (played by Mr T) is asked for a prediction for his fight with Rocky. Lang looks into the camera and menacingly snarls “PAIN!”.  Sadly, that is also the prediction I make today for 2024. 

Consider the challenges faced in 2023: Two wars, two major banks defaulting, an unprecedented 500bp hike in the Fed Funds rate… market resilience this year has almost defied logic.  YTD the S+P is up 17%!  However, those headwinds haven’t disappeared.  They’re merely sleeping. Rate hikes are notoriously laggy. Geopolitics dangerously unpredictable. Add in the potential banana skin of 2 billion people voting globally in elections next year, and the prospects for 2024 look fraught.

Kevin Thozet, member of the investment committee, Carmignac

In H1 2024, the global economy should be resilient to the real rate shock thanks to manufacturing restocking, tight labour markets, a drop in Chinese risk premium and excess liquidity. However, these buffers will weaken in H2 as the effects of monetary tightening peak and central banks start timid rate cuts.

In government bonds, the tug of war between high policy rates and the resurrection of the price discovery mechanism, means that selecting appropriate maturities and regions will matter as much as market direction. Five-year maturities appear to be the sweet spot. Long term deficit financing appeal to few. The soft-landing environment in H1 implies that credit markets will retain their leading spot in terms of risk-adjusted returns. Macro headwinds should arise in H2, making bond picking more crucial.

After a wild run by the Magnificent 7, equity performance drivers will broaden. Such concentrated returns require some wariness; implementing a barbell approach to diversify from those favoured names makes sense. Defensiveness via healthcare and staples and some higher return potential via emerging markets on the other side.  

Chris Jackson, global head of equities strategy and head of EMEA equities, Liquidnet

The past 12 months have shaken European equity markets, as higher rates and geo-political uncertainty have slowed activity and diluted investor conviction. A primary concern for participants is how to navigate an increasingly nuanced and fragmented liquidity landscape to execute strategies in fast-paced and, at times, unforgiving conditions.

Platforms and brokers’ expertise and technology are essential for sophisticated investors looking to source the types and volumes of liquidity needed to execute complex strategies. Whether seeking specific large blocks or small-mid cap stocks, complex, hard to source and sometimes niche liquidity requires knowledge, connectivity and market access to execute efficiently and effectively. As we reach the peak of the current rates cycle, there will be investment opportunities in primary and secondary markets as long as there is sufficient liquidity to support implementation.  

Looking ahead, success will be driven by the combination of human expertise and relationships, augmented by data and technologies to enhance the liquidity discover process. As buy-side firms plan their 2024 strategies, they are thinking carefully about how to reliably access sometimes niche liquidity in an ever-evolving market

Matthew Hodgson, chief executive and founder, Mosaic Smart Data

In the current climate, gaining a new client is becoming more and more difficult – and banks must do everything in their power to retain and grow existing client accounts. The best advice I’ve heard from one of our customers is – pick the markets you want to excel in and supercharge your sales and customer service by harnessing the power of your untapped transaction data.  

Amidst a backdrop of volatility, economic uncertainty and lower market activity in some asset classes, FICC market participants are struggling more than ever to source and protect liquidity. Data is the key to getting the insights that allow you to see where the herd is trading, where the alpha is, and where you can find the specific instruments you want to trade.

It goes without saying that the last year has been a turbulent period for banks across the globe. For those that have remained profitable, a laser-sharp focus on efficiency has become central to their businesses. With an uncertain year ahead, sales and trading teams must be equipped with tools to improve productivity and efficiency in a cost-effective manner against a backdrop of cost cutting and headcount slimming.

The post The TRADE predictions series 2024: Macro outlooks appeared first on The TRADE.

Traders using the AxeTrader EMS will gain access to Mosaic Smart Data’s MSX analytics platform under the agreement, including real-time counterparty insights, transaction cost analysis (TCA), hit ratios and profitability analytics.

“The ability to deliver high-quality analysis of a firm’s valuable fixed income trading data, captured and normalised by AxeTrader, will be of huge value to our clients. Through this collaboration, clients will be able to maximise their liquidity opportunities in real time and execute with insight seamlessly through AxeTrader,” said Mark Watters, CCO and co-founder of AxeTrading.

Both firms added that as fixed income markets evolve and the adoption of electronic and algorithmic trading, and automation expands, firms must take advantage of their trading data in order to trade more profitably.

“In today’s fixed income markets, access to comprehensive real-time data is not just important for success but a requirement for survival. The differentiator will be how effectively firms extract all the available insights from that data and, crucially, translate them into action,” said Matthew Hodgson, CEO and founder of Mosaic Smart Data.

“We’re always looking for more ways to bring this capability to our clients, and this collaboration with AxeTrading will greatly enhance the potential of the MSX platform for fixed income market participants.”

Mosaic Smart Data recently teamed up with CLS and MUFG to launch a free data service aimed at helping trader navigate the increased market volatility. Known as FXLIQUIDITY, the weekly analysis on key currency pairs includes data from FX settlement provider CLS and data from the FX order book at broker-dealer MUFG, powered by Mosaic Smart Data’s software analytics.

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Known as FXLIQUIDITY, the weekly analysis on key currency pairs will be made available to registered market participants free of charge. It includes market data from FX settlement provider CLS and data from the FX order book at broker-dealer MUFG, powered by Mosaic Smart Data’s software analytics.

“In turbulent market conditions such as these, real-time market analytics are more valuable than ever for guiding timely decisions by market participants,” said Professor Rama Cont, chair of mathematical finance at the University of Oxford, and chief scientific advisor to Mosaic Smart Data.

The collaboration was established in just a matter of weeks after MUFG noted the need for market participants to gain additional visibility and transparency into FX liquidity and the volatility prompted by the coronavirus pandemic.

“The economic consequences of the COVID-19 pandemic are truly staggering, and unlike anything experienced before. Clearly, the way in which economies across the world are rapidly adjusting creates many new variables which can be fast-moving and difficult to navigate,” said John Winter, CEO of MUFG Securities EMEA.

In its most recent FXLIQUIDITY report, Mosaic Smart Data said liquidity in FX markets is returning to pre-COVID-19 levels for some G10 currencies, although emerging markets still have room for improvement. It also revealed that spreads have narrowed from the peaks in several major currencies, but remain elevated for others such as EUR and GBP.

“Following the outbreak of COVID-19, a number of institutions expressed a need for greater understanding of market behaviour as well as their own trading activity,” added Masami Johnstone, head of information services at CLS. “With its advanced analytics and software architecture built specifically to manage the high volumes of FX data, Mosaic Smart Data was a great fit for this analysis.”

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Mike Thorpe has been appointed head of sales at Mosaic Smart Data, tasked with growing the firm’s client base and supporting existing clients in onboarding further features and asset classes on its MSX analytics platform. 

Thorpe had led sales across Europe for Tradeweb since 2014,responsible for the fixed income trading specialist’s buy-side client relationships. He also previously worked at MarketAxess, as well as investment banks Citi and Merrill Lynch in FX and fixed income sales roles.

“Mike has a wealth of specialised experience and an impeccable reputation across financial services. We are very pleased that he will be joining us as we embark on the next exciting steps of our journey,” said Matthew Hodgson, CEO and founder of Mosaic Smart Data. 

Mosaic Smart Data, which is backed by major institutions such as JP Morgan and Commerzbank, offers banks prediction analysis and AI technology for large volumes of data within sales, trading and compliance teams. The company was recently awarded ‘FinTech of the year’ at The TRADE’s Leaders in Trading awards ceremony in November.

“Having worked with some of the world’s top financial services institutions, over the last few years conversations have increasingly turned to the need for data analytics. It is now top of the agenda for firms across the markets, on the buy-side and sell-side. It is very exciting to be joining a company at the forefront of delivering this technology,” Thorpe commented on his new role.

“The revolutionary work that Matthew Hodgson and the highly skilled team at Mosaic Smart Data have been doing has garnered much attention from across the industry and I am very pleased to now be joining the team at a new stage of the company’s growth.”

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According to the Bank for International Settlements (BIS) triennial survey on turnover in OTC FX markets, trading in global markets per day increased from $5.1 trillion per day three years ago, fuelled by strong growth in FX derivatives trading, particularly FX swaps.

The survey found that while the share of currency trading taking place in the US declined from 20% in 2016 to 17% in 2019, the UK strengthened its position as the leading FX trading hub globally as its share of FX trading increased to 43% in April this year, despite the spectre of Brexit.

“While New York’s overall market share as a trading hub has slipped, London has increased and reinforced its position the world’s pre-eminent FX hub,” chief executive of interdealer broker ParFX, Dan Marcus, commented on the results. “This is testament to London’s long-standing global trading relationships, concentration of counterparties and continued investment in technology infrastructure. From a foreign exchange perspective, there is no doubt that London remains a global centre of excellence.”

At the same time, the share of FX trading taking place in Asia decreased slightly to 20% over the same period due to a slowdown of activity in Singapore and Tokyo. However, currency trading in China saw a surge in activity to $136 billion in 2019, up a significant 87% from three years prior.

Matthew Hodgson, CEO and founder of FICC data analytics firm Mosaic Smart Data, also commented that the growth in FX derivatives revealed by the survey marks a challenge for participants in terms of risk and data handling.

“These more complex instruments bring with them their own challenges – especially when it comes to managing and monitoring price and risk. The FX markets still lack standardised messaging or a central ticker, making it difficult for market participants to understand what is going on across their own FX business,” Hodgson said.

“The FX markets are already the most liquid in the world, creating a huge data challenge. If we’re going to see these growth trends continue, data handling and analytics systems are going to need to evolve to keep pace.”

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Fixed income, currencies and commodities (FICC) analytics specialist Mosaic Smart Data has gained a $9 million investment led by Commerzbank’s venture capital fund, CommerzVentures.

CommerzVentures co-led the funding round alongside Octopus Ventures. US investment bank JP Morgan also participated in the fundraising, increasing its initial stake in Mosaic Smart Data after opting to invest in the firm in March.

JP Morgan signed a multi-year deal with Mosaic in October 2017 to implement its technology across its fixed income and rates sales and trading business. The vendor was the first firm to graduate JP Morgan’s  In-Residence programme.

“Today’s financial markets are awash in data at a scale never seen before, but what really drives performance is being able to extract truly actionable insights from that data in real-time,” Warren Rabin, co-head of global macro sales and marketing at JP Morgan, commented.

“Tools like this that quickly make sense of vast data sets are changing the way our teams respond and operate and are going to become a differentiating factor for banks as they look to add value in their client discussions.”

Mosaic Smart Data’s platform allows banks, buy-side firms, custodians, exchanges and regulators to use prediction analysis and machine learning technology to normalise vast volumes of data within sales, trading, management and compliance teams.

The firm added that institutions are increasingly looking to extract value from the untapped transaction and pricing data, with annual spending on data analytics and market data having grown to $30.5 billion a year.

“Data analytics is becoming an integral part of every industry and the capital markets are no different,” said Heiko Schwender, principal at CommerzVentures. “We will soon be at a position where it is a prerequisite for performance in the markets. This presents a huge opportunity for Mosaic Smart Data, which has built a platform which sets the gold standard for capital markets analytics. We are thrilled to be part of Mosaic Smart Data’s journey.”

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The collaboration will see the ESA give Mosaic access to two algorithm sets focusing on data models used to identify patterns and correlations used by the agency for investigating anomalies of deep space satellite missions.

As well as application for market surveillance purposes, the technology may be effective in automatically identifying and creating hedging strategy recommendations, as well as giving sales and trading teams a much better indication of the market factors impacting their performance.

“From fighting climate change to improving financial market surveillance, data analytics technology has the potential to radically reshape the way we approach challenges in many different industries,” said Matthew Hodgson, CEO of Mosaic Smart Data.

“Through this collaboration we have an incredible opportunity to apply some of the world’s most advanced data analytics models to the problems our clients face in financial markets. Not only that, but we will also be sharing the results of this project with the European Space Agency to help advance their analytics development.”

In the initial phase of the collaboration, brought about through ESA Business Applications’ zero-equity programme, Mosaic will complete a joint-funded feasibility study to explore how ESA’s machine learning technology can benefit financial market participants. If successful, the technology will be built into Mosaic’s suite of analytics models.

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The move follows the US investment bank’s decision to sign a multi-year deal with Mosaic in October to implement its technology across its fixed income and rates sales and trading business.

Mosaic Smart Data allows banks to use prediction analysis and AI technology for vast volumes of data within sales, trading, management and compliance teams, meaning JP Morgan’s traders can better visualise and anticipate market and client activity.

The investment will be used to expand the range of asset classes Mosaic’s platform currently supports, the firm said.

“JP Morgan’s investment is testament that our technology has been built specifically for the challenges of capital markets,” Matthew Hodgson, founder and CEO of Mosaic Smart Data, commented. “We look forward to using the investment to further empower our clients to gain insights across asset classes.”

In October last year Mosaic became the first firm to graduate from JP Morgan’s In-Residence FinTech programe, designed to support technology startups commercialise products and services.

Warren Rabin, the head of macro sales in America at JP Morgan added the bank is investing in its sales force, and technology is part of the investment. “These investments in people and technology reinforce our commitment to putting clients first in every aspect of our business,” he said.

JP Morgan saw a difficult year in fixed income, with revenues down 34% in 2017 compared to the previous year, driven by low volatility and tighter credit spreads. Overall, the bank’s markets and investor services revenues declined 22% year on year to $4.4 billion.

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The multi-year deal which spans the entire fixed income trading business, will allow the fixed income trading teams at JP Morgan better visualise and anticipate market and client activity, while reducing the cost and complexity of compliance.

Mosaic Smart Data allows banks to use prediction analysis and AI technology for vast volumes of data within sales, trading, management and compliance teams, in a bid to better understand and monitor clients needs.

Troy Rohrbaugh, global head of macro at JP Morgan, explained having a more holistic view of trading data will improve the service delivery for clients. 

“The Mosaic platform integrates securely with our existing technology infrastructure, and enables our teams to quickly make better informed decisions,” he said.

Chief administrative officer of the corporate and investment bank at JP Morgan, Sanoke Viswanathan, added hundreds of FinTech firms were reviewed as part of the bank’s In-Residence programme.

“Mosaic has been successful because they demonstrated the ability to partner closely with us and co-develop the product,” Viswanathan said. 

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