Tradeweb Adds European Data to US Bond Pricing Engine

Tradeweb has added European institutional trading data and revised machine-learning models to Ai-Price, its pricing engine for US corporate bonds. AiEX, Tradeweb’s automated execution system, uses the resulting bid and offer prices.London's trading industry is coming home!According to the company’s announcement, Ai-Price covers US investment-grade and high-yield bonds. It combines public Trade Reporting and Compliance Engine (TRACE) data with Tradeweb’s own trading and market datasets to produce bid and offer estimates. European Trades Inform US Bond Prices The new inputs include institutional trading activity from European credit markets. Tradeweb said the additional data should help Ai-Price respond more quickly to intraday changes, including when individual corporate bonds trade infrequently in the US. The company has also updated the machine-learning models used to calculate the estimates. It did not disclose their architecture, training methods or performance against the previous version. The European data may be particularly useful for bonds issued by companies that trade on both sides of the Atlantic. Activity during European market hours can provide another reference point before liquidity develops in the US session.Pricing Feeds Automated Execution Institutional clients can use Ai-Price before a trade to assess liquidity and estimated execution costs. During a trade, its prices provide a reference for comparing dealer responses. The estimates are also used in post-trade cost analysis. Ai-Price supplies data to Automated Intelligent Execution, or AiEX, which executes eligible orders according to rules set by the client. Tradeweb said the updated prices could support automation of larger or less liquid trades that clients may otherwise handle manually. The company has not provided data showing whether the upgrade has increased the size or number of orders suitable for AiEX. Tradeweb also uses Ai-Price data in TARA, its generative AI research assistant. TARA helps credit traders examine liquidity, market participation, historical execution and relative pricing. As Finance Magnates previously reported, Tradeweb said adoption of AiEX was increasing during the second quarter. Tradeweb did not disclose accuracy measurements for the upgraded model, AiEX execution volumes or any reduction in manual handling. It plans to extend Ai-Price to other fixed-income markets, including emerging-market bonds, but has not provided a timetable. This article was written by Tanya Chepkova at www.financemagnates.com.