FICC weakness persists on Wall Street

摘要

Gaining market share from European banks may not be enough for US bulge-bracket players to cover up another disappointing quarter in fixed income trading when the latter start reporting their first-half figures this coming week. Research from Morgan Stanley has suggested that competition for the remaining business is heating up, cutting into already slim profit margins. Although European banks are being squeezed, pinching their market share may make little difference in a market where combined revenues are still shrinking fast. Keefe Bruyette & Woods analyst Christopher Mutascio said he had adjusted his models to show no growth in fixed income trading through to the end of 2016. He said that this trading no longer affected the valuation of the bank stocks in question. Instead, he now urged the institutions' managements to take more radical action and "rip the band aid off".