Tradeweb launches AI pricing service for US municipal bonds
Tradeweb Markets Inc. (NASDAQ:TW) today announced the launch of Tradeweb Ai-Price for municipal bonds, which will use machine learning and proprietary data science to calculate daily prices for municipal bonds.
The $4 trillion municipal bond market plays a critical role in the United States economy, financing operations and projects for state and local governments and their agencies. While municipal bonds are widely held by retail and institutional investors, only 1.9% of tax-free fixed coupon municipal bonds traded on a daily basis during the month of March 2022. This relatively low turnover impacts price discovery, making it potentially costlier and/or more time-consuming to buy, sell or hold these bonds.
Ai-Price for municipal bonds addresses this problem through a combination of proprietary data, machine learning and other advanced data science methods, producing reliable pricing levels regardless of how often these bonds trade. Tradeweb Ai-Price for municipal bonds will initially publish end-of-day prices for approximately 880,000 securities and custom portfolios, based on data published by the Municipal Securities Rulemaking Board (MSRB) and through trading activity on the Tradeweb platform. In time, Tradeweb will expand the model to calculate intraday price updates.
Lisa Schirf, Managing Director, Global Head of Data Strategy at Tradeweb, said:
“Ai-Price represents the next frontier in applying data science to help make markets more efficient. We collaborated with clients as we developed this tool, and we are excited to offer increased transparency, accessibility and reliability to clients who trade and invest in the municipal bond market.”
Investors in every major fixed income asset class rely on Tradeweb data to price trades and portfolios. In addition to Tradeweb Ai-Price, Tradeweb also calculates IOSCO certified end-of-day prices for U.K. Gilts and U.S. Treasuries, which traders and investors can access through a variety of formats, including the cloud-based AWS Data Exchange.