AxessPoint: Axe quality and reliability evolution across major markets

Highlights

• Axe quality is improving in line with growing contribution. We see increasing dealer participation & bond coverage across major markets – alongside tighter pricing and more reliable liquidity provision.

• Axed trading significantly outperforms non-Axed activity across response rates, win rates, and execution quality when using CP+™ pricing data to assess quality and performance.

Axes matter to buy-side clients because they provide a clear, actionable signal of dealer interest. By highlighting where liquidity sits, axes help traders select the most responsive dealers, and improve execution outcomes - particularly when liquidity is fragmented or when market impact is a concern. Clients use axes to identify which dealers are best positioned on a given bond, to streamline dealer selection through tools like our own Smart Select, and to engage more confidently in high-touch or block-size trades.

Growth in axe content

Axe contributions expanded substantially in Q4 2025 across both US and European investment-grade markets. US HG averaged 8,291 bonds per day from 30 dealers, representing a 21% increase from Q2 2025. EUR IG reached 7,046 bonds daily from 51 dealers, marking an even stronger 25% growth over the same period.

The higher dealer count in EUR IG combined with the steeper growth trajectory indicates particularly strong adoption of axe-based workflows in European markets. This expansion reflects growing dealer commitment to disclosed liquidity provision and signals that axe content is becoming essential for competitive positioning.

Improving quality of pre-trade content

Beyond contribution, the reliability of axe content improved meaningfully throughout 2025. Dealers' axe levels have become more precise, with a greater proportion of responses showing minimal or no slippage.

EUR IG Quarterly axed response quality (2025)

US HG quarterly axed response quality (2025)

EUR IG responses showed zero slippage 65% of the time by Q4, up from 57% in Q2. US HG demonstrated similarly sharper improvement, with no-slippage responses rising from 44% to 48%, and responses within half the CP+ Bid/Offer Spread of their Axe or better jumping from 62% to 69%. This reflects dealers' growing sophistication in axe management and increased confidence in committing to tighter disclosed levels.

EUR IG vs US HG axed response quality by axe size bucket Q4 2025

Splitting Axed responses by the size of the Axe, we do not see a correlation between increasing axe size and degrading Axe quality. In EUR IG, ‘1MM-5MM’ Axes saw the best response quality, followed by the ‘>=5MM’ bucket. US HG dealers saw the best response levels vs their Axes for the ‘100K-1MM’ bucket, followed by ‘>=5MM’. Neither product saw responses with greatest slippage in the block Axe sizes.

Axe performance vs wider platform activity

Q4 data reveals that axed content drives materially superior trading outcomes across all markets for sizes >=1MM. Response rates are 2-5x higher when dealers are axed, and win rates are 1.5-2.7x greater.

Q4 2025 Cross-Market Performance (1MM+)

Axed dealers show dramatically higher engagement: 2.1x higher response rates in EUR IG, 2.9x in US HG, and 5.3x in US EM - indicating strong reliability and liquidity interest from Axes. When Axed, dealers also win tickets at significantly higher rates, with Axed dealers’ win rates (*) in EUR IG at 2.7x that of non-Axed dealers, and 1.5-1.7x for US HG and EM.

Relative to penetration of Axes, EUR IG demonstrates the most mature Axe ecosystem on MarketAxess, with 61% of inquiries inviting at least one Axed dealer, and 48% of inquiries being won by an Axed dealer. US HG (26%) and US EM (15%) show lower but growing adoption, suggesting significant expansion potential in US markets.

*Win Rate: % of dealer responses that won on inquires.

Conclusion

In Q4 2025, axe-based trading demonstrated substantial growth and improved quality across major bond markets, significantly outperforming non-axed activity in response rates, win rates, and execution quality. By using CP+ pricing data, we can definitively measure the quality and performance of Axes vs non-Axed trades and see the improvement in reliability of axe content during 2025 as dealers became more precise in their axe levels and commit to tighter disclosed levels.