(Reuters) – MarketAxess Holdings reported a better-than-expected second-quarter profit on Thursday, as a bustling Eurobond market helped offset the hit from a decline in U.S. government bond trading.
The New York-based bond trader reported a profit of $1.59 per share for the three months ended June 30, beating analysts’ estimates of $1.57 per share, according to Refinitiv data.
Shares of the company rose nearly 5% and were on track for their biggest one-day percentage gain since Jan. 25.
MarketAxess is an electronic trading platform for institutional investors and broker-dealers to trade corporate bonds and other fixed-income products.
Volatility in European bond markets has persisted, with the European Central Bank signaling that it may need to continue raising interest rates to tame inflation, in contrast to the U.S. Federal Reserve, which paused last month after 10 consecutive hikes.
That prompted Eurobond investors to keep rejigging their portfolios, boosting trading volumes for the segment by 30.2% in the second quarter. Eurobonds are debt instruments issued by European corporations.
However, a 33.1% slump in trading volumes for U.S. government bonds proved a drag.
U.S. bond investors had a tense few weeks in the quarter when a tussle in Washington over raising the federal debt limit brought the government perilously close to a default, which was eventually averted.
But critics have said such close calls with a potential default could hurt the country’s financial reputation and dim the appeal of bonds issued by the Treasury.
MarketAxess reported a 3% drop in income from commissions, to $158.6 million.
(Reporting by Sri Hari N S in Bengaluru; Editing by Pooja Desai and Maju Samuel)
