Bond traders are enjoying a strong start to 2017.
Both JPMorgan and Citigroup announced first-quarter earnings on Thursday and posted better-than-expected trading revenue.
At JPMorgan, markets and investor services revenue, at $6.5 billion, was up 13% year-on-year, with the fixed income, currencies, and commodities business enjoying a strong start to the year. Revenue in that business was up 17%, with the bank citing strength in securitized products, rates, and credit.
In February, the bank had said it expected only a modest bump in trading revenue. On a call with the media, CFO Marianne Lake said that while January had been strong, February was quiet with very low levels of volatility. “That changed to a degree in March,” she said.
At Citigroup, fixed-income revenue totaled $3.62 billion, up 19% year-over-year, ahead of the expectation for $3.52 billion. That’s the highest level of fixed-income revenue in three years. Citigroup cited strength in both rates and currencies and spread products.
The results set the scene for a strong year for fixed income, currencies, and commodities. That business has struggled through the past few years in a period of increased regulation and reduced volatility.
But 2016 saw a rebound in industry revenue. It looks as if 2017 may continue that trend.