Responding to pressure
08 Jan 2025
Jack McRae speaks to Maria Calderon, head of LatAm Sales at MarketAxess, about what 2025 holds for the asset servicing industry in the region
Image: MarketAxess
The state of play
The asset servicing industry in Latin America is under a lot of pressure, according to Maria Calderon, head of LatAm Sales at MarketAxess.
Calderon believes that emerging markets and LatAm face this pressure as a result of “the uncertainty of further cuts from the Fed, an incoming Trump administration tariff regime, as well as local challenges from each country.”
Donald Trump will be sworn into the White House on the 20 January and become President for a second term.
Riding a wave of American-first, protectionist policies to defeat incumbent vice-president Kamala Harris to the Presidency, Trump has promised a wave of high, aggressive tariffs which could strain relationships with and markets within LatAm.
Despite this pressure, she argues that there are reasons to be positive about LatAm.
“There were surprising bright spots in the high yield emerging markets universe including Argentinian and Ecuadorian assets,” Calderon explains.
“And when looking back at the beginning of the year, there were surprise inflows into Mexican assets.”
Calderon points to how, over the course of 2024, “we saw an increase of 42 per cent in debt offerings from Latin American sovereign issuers as well corporate issuers when compared to 2023.”
She expects this trend — which she describes as a “a positive boost to liquidity and volumes for the region” — to continue this year and suggests that this figure could potentially be higher. This figure is dependent on the Fed interest rate cut decision.
“On the first Monday back in the New Year, we saw Mexico kick-off with a record size 8.5 billion sovereign bond offering, which sets the tone for other issuers to follow,” Calderon says.
“At MarketAxess, we saw record volumes across emerging markets hard currency and local markets, despite the fact that local markets took a back seat given significant FX challenges throughout the year. “
Growing demand
Across the industry and around the world, the need for accurate and reliable data is becoming increasingly vital by the day. As technology develops and automation becomes the focus for a number of key players, having a reliable set of data becomes imperative — a fact that is not lost in Latin America.
“LatAm is starting to pay attention to enriched data and AI driven tools to source data,” Calderon explains. “Investors are fragmented mostly to their own locally sourced asset pricing. We have run into a number of investors who are starting to rely on advanced sets of data, which they are putting to work for modelling their investment decisions.”
Calderon believes that while advanced datasets may be in their early stages of deployment, there is, she says, “no question demand will grow in this sector.”
Data and technology go hand-in-hand and Calderon is witnessing trading technology evolve across LatAm. She explains that the region is seeing “significant new user adoption and cross selling into cutting edge technologies.”
Calderon continues to suggest that “the region may skip early migration into technology and head directly into advanced usage. We see large adoption of block trading, RFM trading and demand for order book style trading which typically relies on fast technology.”
Looking ahead, Calderon believes that this year will see investors using technology to help overcome challenges in navigating complex markets. Also within the technology space, Calderon believes that the industry will see “investors becoming more comfortable around trading block sizes electronically.”
The key, advanced technologies that Calderon expects to be at the forefront of driving innovation in LatAm markets all focus on streamlining workflows. She points to automation and AI-driven gears that benefit portfolio trading and targeted trading as two developments to watch out for in the region.
As the world and LatAm braces for the impact of another four years of a Trump-led US government, the asset servicing industry will have to be adaptable and responsive to any major challenges on the horizon. It is clear that technology and data will once again grab the headlines in the industry, but firms will know it is time for action, rather than talk, as the industry evolves into an age of AI, automation, and digitisation.
The asset servicing industry in Latin America is under a lot of pressure, according to Maria Calderon, head of LatAm Sales at MarketAxess.
Calderon believes that emerging markets and LatAm face this pressure as a result of “the uncertainty of further cuts from the Fed, an incoming Trump administration tariff regime, as well as local challenges from each country.”
Donald Trump will be sworn into the White House on the 20 January and become President for a second term.
Riding a wave of American-first, protectionist policies to defeat incumbent vice-president Kamala Harris to the Presidency, Trump has promised a wave of high, aggressive tariffs which could strain relationships with and markets within LatAm.
Despite this pressure, she argues that there are reasons to be positive about LatAm.
“There were surprising bright spots in the high yield emerging markets universe including Argentinian and Ecuadorian assets,” Calderon explains.
“And when looking back at the beginning of the year, there were surprise inflows into Mexican assets.”
Calderon points to how, over the course of 2024, “we saw an increase of 42 per cent in debt offerings from Latin American sovereign issuers as well corporate issuers when compared to 2023.”
She expects this trend — which she describes as a “a positive boost to liquidity and volumes for the region” — to continue this year and suggests that this figure could potentially be higher. This figure is dependent on the Fed interest rate cut decision.
“On the first Monday back in the New Year, we saw Mexico kick-off with a record size 8.5 billion sovereign bond offering, which sets the tone for other issuers to follow,” Calderon says.
“At MarketAxess, we saw record volumes across emerging markets hard currency and local markets, despite the fact that local markets took a back seat given significant FX challenges throughout the year. “
Growing demand
Across the industry and around the world, the need for accurate and reliable data is becoming increasingly vital by the day. As technology develops and automation becomes the focus for a number of key players, having a reliable set of data becomes imperative — a fact that is not lost in Latin America.
“LatAm is starting to pay attention to enriched data and AI driven tools to source data,” Calderon explains. “Investors are fragmented mostly to their own locally sourced asset pricing. We have run into a number of investors who are starting to rely on advanced sets of data, which they are putting to work for modelling their investment decisions.”
Calderon believes that while advanced datasets may be in their early stages of deployment, there is, she says, “no question demand will grow in this sector.”
Data and technology go hand-in-hand and Calderon is witnessing trading technology evolve across LatAm. She explains that the region is seeing “significant new user adoption and cross selling into cutting edge technologies.”
Calderon continues to suggest that “the region may skip early migration into technology and head directly into advanced usage. We see large adoption of block trading, RFM trading and demand for order book style trading which typically relies on fast technology.”
Looking ahead, Calderon believes that this year will see investors using technology to help overcome challenges in navigating complex markets. Also within the technology space, Calderon believes that the industry will see “investors becoming more comfortable around trading block sizes electronically.”
The key, advanced technologies that Calderon expects to be at the forefront of driving innovation in LatAm markets all focus on streamlining workflows. She points to automation and AI-driven gears that benefit portfolio trading and targeted trading as two developments to watch out for in the region.
As the world and LatAm braces for the impact of another four years of a Trump-led US government, the asset servicing industry will have to be adaptable and responsive to any major challenges on the horizon. It is clear that technology and data will once again grab the headlines in the industry, but firms will know it is time for action, rather than talk, as the industry evolves into an age of AI, automation, and digitisation.
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