Global Government Bond Markets: Volatility and Record Liquidity in April 2025

The Tradeweb Government Bond Update for April 2025 reveals a landscape of stark contrasts: bond yields in most major economies plunged to historic lows, while trading volumes surged to record highs amid geopolitical tension and shifting central bank policies. This report unpacks the drivers behind these trends and their implications for investors.

Bond Yields: A Tale of Declines and Exceptions

The month of April saw dramatic shifts in government bond yields, with only Canada defying the downward trend.

• U.S. Treasuries: The 10-year yield swung wildly, dropping to 3.99% immediately after tariff hikes were announced on April 2, before rebounding to 4.49% on April 11. It settled at 4.17% by month-end. This volatility mirrored economic headwinds: the U.S. GDP contracted by 0.3% in Q1 2025, while inflation eased to 2.4% in March.
• Germany: The 10-year Bund yield fell 28 basis points (bps) to 2.45%, as inflation dipped to 2.1%—its lowest since October 2024.
• Greece: A 25 bps decline to 3.26% followed S&P’s upgrade to “BBB”, reflecting improved fiscal discipline.
• Australia: Yields plunged 30 bps to 4.06%, despite the RBA holding rates at 4.1%.

The exception was Canada, where yields rose 12 bps to 3.09%, as the Bank of Canada maintained a hawkish stance despite inflation falling to 2.3%.

Trading Volumes Hit Historic Peaks

April’s market turbulence fueled record trading activity. Tradeweb reported:
- Average daily volume (ADV) of $2.5 trillion, a 33.7% year-over-year (YoY) surge.
- U.S. government bonds saw a single-day ADV of $472.5 billion on April 9, driven by tariff-related volatility.
- European government bonds ADV rose 18.9% YoY, with Tradeweb completing its first electronic portfolio trading transaction for Bunds.
- Money markets ADV jumped 78.5% YoY, fueled by repurchase agreements and the integration of ICD (acquired in August 2024).

Tradeweb’s Financial Dominance

The firm’s infrastructure capitalized on this volatility, delivering:
- Revenue: $509.7 million (+24.7% YoY), driven by rates and credit trading.
- Adjusted EBITDA: $278.2 million (+26.7% YoY), with margins expanding to 54.6%.
- Net income: $168.3 million (+17.4% YoY).

Key segments performed as follows:
- Rates: ADV grew 14% YoY, with U.S. Treasuries and swaps/swaptions leading.
- Credit: ADV surged 39.4% YoY, with Tradeweb capturing 26% of fully electronic U.S. high-grade credit volumes.

Market Context: Inflation, Policy, and Volatility

• Inflation trends: Most economies saw cooling price pressures, with U.S. inflation at 2.4%, Germany at 2.1%, and Japan at 3.6% (its lowest since November 2024).
• Central banks: The Bank of Japan and RBA held rates steady, while the ECB and BoC maintained accommodative stances.
• Volatility drivers: Geopolitical risks (tariffs) and economic uncertainty amplified demand for liquidity, boosting Tradeweb’s role as an electronic trading hub.

Investment Implications

1. Bond Market Opportunities:
2. The U.S. Treasury yield curve remains attractive for income investors, despite short-term volatility.
3. European bonds (e.g., Germany, France) offer stability amid low inflation, though yields remain modest.

4. Canada’s rising yields may appeal to those seeking higher returns in a hawkish environment.

5. Tradeweb as an Infrastructure Play:

6. The firm’s $509.7 million revenue and record volumes underscore its dominance in electronic trading.

7. shows strong upside potential, particularly if volatility persists.

8. Sector Risks:

9. A sudden policy shift (e.g., the Fed reversing dovish stance) could compress bond prices.
10. Geopolitical risks (e.g., trade wars) could sustain market turbulence and liquidity demand.

Conclusion

April 2025 was a month of extremes: bond yields fell to multi-year lows, trading volumes hit records, and Tradeweb solidified its position as the liquidity engine of global fixed-income markets. With inflation cooling and central banks leaning dovish, investors may favor long-duration bonds for yield stability. Meanwhile, Tradeweb’s 33.7% YoY ADV growth and 26.7% EBITDA expansion highlight its structural growth thesis. For traders and allocators alike, the data underscores a market where electronic liquidity and volatility are the new constants.

Investors should monitor Tradeweb’s Q2 results for clues on whether these trends persist—and whether the firm can capitalize on them.