As the turmoil in the fixed income markets pushes firms to look further afield for alternative investment options, municipal bonds have become a surprise hotspot. Although it’s been a rough year for the municipal bond market, surging yields are attracting investment managers into the market to take advantage of the opportunity.
Yet despite the turbulent volatility in the US rates market, fewer than 3% of tax-free fixed coupon US municipal bonds currently trade on a daily basis, impacting price discovery and transparency of these bonds. Accessing data sets has become increasingly essential to form an accurate price, enabling market participants to manage risk more effectively and make better informed trading decisions.
SIX has addressed this issue by partnering with Tradeweb to offer its clients access to Tradeweb Municipal Ai-Price, which provides a combination of proprietary data, machine learning and other data science methods.
The service provides daily pricing on over 960,000 municipal bonds using inputs from data published by the Municipal Securities Rulemaking Board (MSRB) and proprietary data from the Tradeweb platform.
Shai Popat, managing director, head product and commercial strategy financial information at SIX, said: “Through this collaboration with Tradeweb, SIX offers its clients a greater level of municipal bond data to power their operations and risk management systems. Clients can receive this data in a standardised format, in conjunction with our high-quality rates, pricing and reference data, as well as our renowned corporate actions and regulatory data.”
Lisa Schirf, managing director, global head of data strategy at Tradeweb, added: “With a long history in the municipal bond space, we are excited to offer a solution that increases transparency and accessibility for clients of SIX. We believe Tradeweb Municipal Ai-Price represents the next frontier in applying data science to help make markets more efficient with high-quality, accurate intraday and closing reference prices.”