………..or does it?

The Q3 launch of LiquidityHub, via Bloomberg and Reuters, is only a few months away, late August to early September is my mail. In saying that, it is more a two-thirds launch as US Treasuries will only come in Phase 2, later in the year.

So concentrating on the EUR and USD IRS products, surveys state vanilla Swaps account for 70%+ of the turnover in the market and that swaps denominated in euros and dollars account for 80%+ of the market. The conclusion to draw from this is that initially LiquidityHub will cover the bulk of the trading required in swaps.

The only thing is that, just as with ice-cream, there are different variants of vanilla. LiquidityHub will offer EUR Swap vs. 3 and 6-month Euribor and USD Swap Semi and Annual vs. 3-month Libor – admittedly in a competitive environment. Now that’s as plain vanilla as you can get, no vanilla bean in that one. So for Hedge Funds and Funds there will be no non-standard dates, no forward start swaps, curve trades etc. Which is what these guys have asked for, these products, plus the most vanilla, in a competitive environment.

Regarding US Treasuries, they will be offering streaming two-way prices (let’s hope the spreads aren’t “drive a truck through it” wide) but you can’t do switches as yet.

Now I don’t want to sound too down on LiquidityHub as I think, as a start, it is good and God knows the difficulty experienced, and to be experienced, in getting 15 Banks to come together on something. However I think, to start, it will not quench the thirst for e-Trading of Swaps (especially for the Buyside)…..it will only make people more thirsty.

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