The rise of European credit automation

Automation in European credit trading is moving from early adoption to mainstream execution. Greater transparency, deeper liquidity pools and the rapid expansion of high-quality data are reshaping how participants interact with the market. This evolution is being driven from both sides of the market. Buy side firms are increasingly automating liquidity-taking workflows to manage growing order volumes efficiently. At the same time, dealers are enhancing algorithmic pricing models, expanding coverage and increasing quote sizes. Together, these developments are improving execution quality and creating a demand for automation across the European credit market.

Client automation moves into the mainstream

Since launching our automation protocol, Auto-X™ RFQ in 2018, adoption has steadily accelerated, along with the way clients are using it. Among our largest clients in Q1 2026, approximately a third of tickets and 17% of Euro investment-grade volume were executed via Auto-X.

Buy side clients: increasingly customized and prescriptive

In Q1 2026, 75% of tickets and 52% of volume in sizes up to €5 million were automated by our largest automation clients. In the €3–€5 million EUR IG bucket, automation penetration across our client base increased significantly between Q1 2023 and Q1 2026, rising from 2% to 7% of both ticket count and traded volume. This 250% increase in automation share illustrates continued strong adoption.

Market-wide data from TraX^® underscores the opportunity for automation in the market.

Automation: greater efficiency for EUR IG “non-blocks”¹

¹Yearly volume in “non-blocks” has increased by 43% between 2020 and 2025 according to TraX.

The data indicates that 97% of overall tickets in European credit were less than or equal to €5 million. Automating a greater number of those more liquid orders would offer desks the ability to reallocate time and expertise toward larger, more complex trades that benefit most from manual intervention.

Customization drives surge in automation

Clients want to improve efficiency, lower execution costs, and create more opportunities for price improvement. Auto-X RFQ delivers in all three areas. As an intuitive, rules-based automation tool, it allows clients to streamline part—or all—of their execution workflow while maintaining control over how trades are handled.

The benefits are twofold. First, Auto-X RFQ brings advanced, data-driven decision-making to the forefront. It is powered by CP+™, an AI-driven pricing engine for global credit and rates markets. By combining data from the MarketAxess network with public TRACE information and proprietary TraX inputs, CP+ enhances price discovery, transaction cost analysis, and algorithmic strategy development. This is further supported by the Relative Liquidity Score, which offers a clear view of a bond’s tradability and market depth. Tradability, our machine learning-based AI model, can be used as an expansion to that to predict market depth on a bond, side, and size level.

Second, Auto-X RFQ uses a dynamic waterfall framework for rule configuration. Clients can define automation parameters using variables such as trade size, price thresholds, number of respondents, and more. Through parameter modeling, historical data can be leveraged to evaluate the potential impact of automation before deployment. This level of flexibility supports higher automation rates, improves efficiency in larger trades—including block-sized orders—and allows multiple custom rule sets to be applied across different markets. The result is a more sophisticated and scalable automation workflow.

Dealer algos grow in size and coverage

As clients expand their use of automated trading, dealers are also responding: 65% of Euro HG responses were from algos in 2025, and the average number of responses per RFQ increased from 5.4 in 2023 to 7.1 in 2025. Dealer algos are also covering a broader share of the market: algo coverage expanded from 5,200 ISINs in 2023 to over 6,200 ISINs in 2025.

Top EU HG Dealer algo coverage²

²These areas represent the general coverage where the top dealers reside, by time period.

Crucially, algos are penetrating larger ticket sizes. In the €3–5 million range — once considered challenging for automation — algos accounted for 22% of responses in 2025, more than double the 10% seen in 2023.

As dealers increasingly price larger trades electronically, buy-side clients benefit from deeper liquidity and improved execution outcomes.

Response % from algo (EUR IG)

Percent of trades executed by algo	2023	2025
<3MM	55.5%	66.3% (+10.8pts)
≥3MM and <5MM	11.5%	20.7% (+9.2pts)
≥5MM	8%	12.3% (+4.3pts)

The MarketAxess advantage

MarketAxess continues to drive innovation in automation with Adaptive Auto-X, our latest automation protocol, which is currently being piloted in Europe following a successful rollout in the US. Adaptive Auto-X takes automation to new levels of precision and efficiency by dynamically adjusting execution criteria and execution channels to optimize trading outcomes. It uses smart order routing to integrate matching, responding, posting, and requesting across multiple execution protocols and liquidity pools.

This creates customized workflows aligned with specific trading objectives, all connected through Open Trading, our global, all-to-all, electronic marketplace. Combined with a dedicated global automation team, clients receive hands-on support to refine workflows and identify efficiency gains.

From expansion to expectation

Automation in European credit trading is no longer experimental, it’s becoming the norm. As both buy-side and sell-side participants expand capabilities, liquidity improves, execution becomes faster, and workflows grow more efficient.

With continued advances in data, transparency and AI-driven optimization, the frontier of European credit automation is not just expanding, it is becoming the new standard.