U.S. Treasuries Trading Surged in December as Front-End of Yield Curve Inverted

In U.S. Treasuries Average daily trading volume surged over 40 percent in December from a year earlier to almost $83 billion as the front end of the yield curve inverted for the first time in a decade, trading platform Tradeweb said on Monday.

In Europe, Tradeweb noted that a doubling in trading activity in exchange traded funds (ETF) boosted volumes. European ETF trading volume grew 113.6 percent year-over-year in December, while European government bond trading volume increased 39.5 percent, and European credit volume grew almost 13 percent.

In early December, yields on two-year U.S. government bonds rose above three and five-year bond yields for the first time since 2008, reflecting concerns about a U.S. economic slowdown.

As a result of heightened market volatility, average daily trading volume across rates, credit, money markets and equities surged 40 percent year-on-year to $617.4 billion — representing a new record for Tradeweb, the platform said in its monthly activity report.