credit electronic trading is developing but not so fast

There are some concerns on credit trader being replaced by computer. My conclusion is : not so soon

Unlike on the run treasury and TBA, credit is hard to get automated.

But I do see some trends to help automation:

1) more electronic platforms: used to just marketaxes but now TradeWeb, LiquidNet and TruMid are growin very fast. Some new innovation like electronic relative value trading is coming 2) transparency is increasing because of regulation. MiFiD helped a lot 3) Used to be hard to automate trading decision after news but new news feed like RavenPack and Bloomberg Event Feed make it much easier 4) fixed income index and fixed income ETF is becoming more and more popular. Trade bonds in basket actually help liquidity given there are real money buyer / seller mainly care generic cash flow rather than actual underlying for basket 5) more buy side firms, say Citadel, is joining this market and is providing unique liquidity. How so? It is much easier for them to hedge with another instrument (which reduce market impact) compare to heavily regulated sell side forms. 6) worth to note there are asset management firms trying to increase their internalization.

and most importantly, regulator is attempting to push OTC to MDP. (Multi dealer platform)

of course , voice traders will always be there. Spot fx is highly automated but we still have voice traders for very large orders. Also worth to notice spot fx desks are doing rolling -> use junior to replace senior traders. Not sure if this will happen to credit desk in future.

Side note,I know there are some senior traders survived from automation in equity by moving to less automated emerging market country. Emerging market could be next sweet spot for credit traders too.