Quarterly Trading Report – Q3 2023: A Cruel Summer for Trading Volumes?

Executive summary:

  • During July and August, we observed higher-than-normal volatility in trading volumes across equities, fixed income, foreign exchange and derivatives.
  • Credit volumes witnessed some strong highs and lows in the third quarter. Notably, July—a month where trading volumes are generally steady—saw very inconsistent flows over the month. September, meanwhile, followed historical trends with an increase in primary market supply, reflecting higher volumes in the secondary.
  • In foreign exchange markets, August was the least favorable month for trading conditions during the third quarter. Volatility rose by 2.6% while top-of-book spreads widened by 1.6%.

As the peak summer months during the Northern Hemisphere, July and August are normally calm months for trading volumes across major asset classes, but 2023 bucked the trend.

Among the four major asset classes we trade—equity, fixed income, foreign exchange and derivatives—we observed higher-than-usual volatility in trading volumes during July and August. Instead of a normal steady flow, daily trading volumes in the summer months often varied more than usual, fluctuating wildly from one day to the next.

At Russell Investments, we were well-prepared for this unusual summer experience due to our 35-plus years of experience executing trades for a broad swath of institutional clients. We trade approximately $2.2 trillion on an annual basis through our multi-institutional platform, and maintain a 24-hour global trading desk with access to over 100 countries globally across all asset classes. Drawing on this knowledge, here are our key takeaways from the third quarter of 2023 from the four largest asset classes we trade.