From the financial repression and encumbrance of the central banker to the wild speculators and their angry 'fast-money' flows, we continue to hang on every tick in Europe's bond markets (for both validation of a political leader's view or confirmation of his asininity). The sadder truth is that Europe's secondary bond trading market has shriveled. Spain's Treasury [4] just released August's daily average Spanish government bond trading volumes and they have plunged over 40% YoY - now at levels (under EUR40bn per day) not seen since 1996 (pre-Euro-zone). It strikes us that once they lose the secondary market then the primary market will be very close behind (thanks to liquidity concerns among other things) - unless of course the ECB really does soak up all future issuance and hold-to-maturity.
Just as with US equity trading volumes, European bond trading volumes are falling inexorably...
Source: Tesoro Publico [4]

