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I've been thinking about this a good bit recently since I'm about to start a career in FICC. I think one thing a lot of articles like this get wrong is that they don't differentiate between FICC products. Yeah, super liquid, easily automated products may be at risk of going electronic. But then really bespoke stuff or particularly complex products will be much more difficult to automate. Additionally, it seems the more complicated and illiquid the product, the more autonomy traders have in the way they hedge. Therefore, the guys trading complex and illiquid products can "hedge" in such a way that they take a view and can create what is essentially prop PnL. This is all me speculating on stuff I really don't know a lot about though - would love to hear more informed opinions.
TLDR: Some FICC traders are fucked, others are probably less fucked or won't be fucked for a much longer time, depends on your group just like everything else in S&T.
There are several relatively recent threads on this exact topic already...
Sorry, about today's article?
No, I mean more broadly about the tendencies and developments that the article discusses...
As someone who's invested in this field career-wise, my hope is that once rates rise, bid ask spreads won't be so tight and people will stop caring so much about a basis point. I suspect though that once people's expectations are cemented in that way they'll be highly unlikely to change. However, spreads being wider in absolute, but not necessarily relative, terms due to higher overall rates would have to allow some more profit-making opportunities.
I do think that IG corporates and treasuries are likely to become as computerized as stocks though. I think anything that requires real credit work, because of position on the capital structure or it being an esoteric name, will stay unelectronic "voice" markets because the # of buyers is so small and specific. You need brokers calling clients and knowing who buys what credit, or what part of the capital structure, etc. I can't see that going away.
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