MarketAxess profit rises on demand for high-grade credit, government bonds

(Reuters) - MarketAxess Holdings' second-quarter profit rose 8% due to robust trading activity in high-grade corporate debt and government bonds, it said on Tuesday.

WHY IT'S IMPORTANT

The fixed income-trading platform's results offer an insight into the bond market, widely viewed as a more reliable indicator of recession than the stock market.

Shifting expectations of a rate cut have made it crucial to gauge such trends.

CONTEXT

Demand for investment-grade corporate debt has grown ahead of an expected cut later this year, as investors rush to lock-in current interest rates for years to come.

Geopolitical tensions and worries about the economy have also boosted appetite for safe haven assets like Treasuries and other government bonds.

MarketAxess lost some share of the junk bond market, however, since the extra yield offered by these securities fell short of investors' hopes.

BY THE NUMBERS

The company's net income was $65 million, or $1.72 per share, for the three months ended June 30, compared with $60 million, or $1.59 per share, last year.

The New York-based company's shares have lost 24% so far this year versus rival Tradeweb Markets' 18% gain.

(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)