More than two years after the demise of Bridge, the repercussions can still be felt. The most recent ripples are in fixed-income data, where a number of new players have either already launched (or look likely to launch) new products.
An important catalyst in this activity has been the fact that Bridge enjoyed a number of long-term contracts and exclusive deals with premium data providers that came up for grabs after it collapsed.
A slightly indirect example of this was Moneyline's acquisition of Bridge's Telerate feed, which had previously held an exclusive deal with Cantor for fixed-income data. After acquiring Telerate, Moneyline removed the Cantor data and replaced it with Brokertec in what was commonly assumed to be another exclusive deal.
In fact it wasn't, and this game of musical chairs allowed CQG, a Colorado-based quotation vendor, to slip in and snap up both Brokertec and Cantor as sources for its own newly expanded fixed-income feed. While CQG has offered GovPX U.S. treasuries and Tullett sovereign debt (G7 + Spain) for several years, this move clearly showed that it was making a serious pitch for the fixed-income market.
By also adding Tullett swap data to the Cantor and Brokertec feeds, CQG now has a fixed income and associated swap line-up that it claims is currently unique in the market.
Some see this combination as significant. "The fixed-income market is totally different from, say, a futures market where you have a single defined price source," says Chris Wigley, former chief investment manager for Aioi Insurance Europe. "To pinpoint exactly where the market is in fixed income often requires multiple data sources, so having these key feeds, all in one package, is a definite plus for CQG."
However, apart from the established players in this market, such as Bloomberg, Reuters, and Moneyline Telerate, CQG could, in due course, find itself up against another newcomer - Interactive Data Corporation's eSignal business. eSignal doesn't have a huge pedigree in fixed income (it currently offers U.S. Treasuries and money-market data) but some see its parent's ongoing acquisition of fellow vendor S&P Comstock as a sign that this could all be about to change.
"eSignal is obviously not saying anything because the Comstock acquisition hasn't closed yet," says Penelope Essex of Carrick Consulting. "Nevertheless, it will gain some additional fixed-income data from the deal, in addition to extending its futures and FX coverage. I think the significant point is that eSignal isn't anywhere near as retail focused as many people assume."
However, that functionality will be up against some tough competition. Technical analysis is very much CQG's home territory and one upon which it has built a formidable reputation. "It's a great technical tool and we've used it extensively for analysis of the U.S. treasury market, " says the fixed-income technical strategist for one major Wall Street firm, who declined to be named. "As a result, we're pleased to see CQG adding this new range of fixed-income and swap data."
Whatever the respective merits of the newcomers, they will still find themselves competing in a tough market. Bloomberg has been continuing to make headway at Reuters's expense and is seen by the competition as a tough nut to crack. With Reuters recently reporting its first ever loss since its 1984 flotation and 3000 job cuts, the newcomers will probably see that as the easier target.
In many cases, fixed-income desks have tended to use Bloomberg as their primary provider and Reuters to fill any remaining gaps and for comparison -- that secondary role looks likely to come under considerable pressure.
Nevertheless, keen pricing and data will only take you so far -- users are increasingly swayed by a "one-package" argument. "I think the advent of GovPX effectively killed the premium on data, so having the all prices is, in itself, not particularly compelling," says Peter Vinella, chief executive officer of consultants PVA International. "However, rather than the cost and inconvenience of having to switch among a variety of applications or physical terminals to view prices, perform analysis, and initiate trades; the ability to do all this on one machine (or better still one application) is seen an important factor."