Macaskill on markets: FICC bonanza could soon be but a fond memory
It’s the year that just keeps giving for fixed-income traders. But the growing intensity of the race to exploit this state-sponsored boom suggests that there will be significant disruption when the FICC festive season ends.
Jon Macaskill is one of the leading capital markets and derivatives journalists, with over 20 years’ experience covering financial markets from London and New York. Most recently he worked at one of the biggest global investment banks
Goldman Sachs might well hit $25 billion of revenue for the year in its fixed-income, currency and commodities (FICC) group. JPMorgan could come close to $20 billion of comparable revenue and even beaten-down Bank of America and Citi will be at similar levels if they can avoid fourth-quarter trading mishaps.
FICC sales and trading revenues of roughly $100 billion for the biggest eight players in the first three quarters of 2009 dwarfed comparable equity and corporate finance income. The seasonal downturn from second- to third-quarter revenue was less pronounced than usual for the leading players and fourth-quarter flows are anecdotally healthy. But the dual effects of reduced government support and increased dealer competition threaten to undermine this bonanza in 2010.