* Stock trading on European exchanges highest in a decade
* Thomson Reuters reports record month for FX
* Electronic bond volumes boosted by new EU rules
By Tommy Wilkes and Helen Reid
LONDON, March 6 (Reuters) - Stock, bond and currency trading surged to multi-year highs in February, data showed on Tuesday, as a resurgence in volatility provided a long-awaited boost for trading volumes.
Trading across asset classes rose in January as investors rushed for the exits on growing concerns about rising inflation, and worries about the ramifications of the withdrawal of record central bank stimulus kept traders active in February as well.
European stock exchanges grabbed market share last month from alternative trading venues, recording the busiest trading month in a decade. Cash equity volumes rose sharply on the region's biggest exchanges, with Deutsche Boerse DB1Gn.DE leading the way with a 45-percent year-on-year increase. currency markets, Thomson Reuters TRI.TO said average daily forex trading volumes on its platforms rose to a record $463 billion in February, 37 percent higher than a year earlier, and up from January, which was also a record month.
NEX Group NXGN.L said spot FX trading rose 34 percent in February from a year earlier to $108.3 billion.
Bond trading platforms, which this year have benefited fromthe introduction of sweeping new European financial rulesdesigned to encourage transparency, are also reporting big risesin volumes.
TradeWeb, one of the world's biggest bond platforms andmajority-owned by Thomson Reuters, said European-based clientshad traded 73 percent more European corporate and financialbonds - products affected by the new rules - in February versusa year earlier. bond platform, MarketAxess, saw volumes for thefirst two months of this year rise to $301 billion, up from $238billion last year.
Kevin McPherson, global head of sales at MarketAxess, saidMifid II, as the new European rules are known, was "among thedrivers of the high level of electronic trading".
Global fixed-income markets were showing "signs of returningto more normal levels of volatility," he said.
EQUITY JUMP
Turnover across European equity trading venues last monthwas the highest since May 2008, with around 2.6 trillion eurostraded, according to data from Thomson Reuters Market ShareReporter.
ETF trading volumes grew 23 percent in Europe, andderivative volumes grew at Euronext ENX.PA and DeutscheBoerse, according to UBS analyst Michael Werner. attributed part of the jump to exchanges stealingshare from so-called dark pools of alternative trading. Limitsto dark pool trading, set to be implemented by the EuropeanUnion's market watchdog on March 12, could deliver a furtherboost to the exchanges, Werner said. FOR BANKS
Banks will be hoping that the bounce in trading volumes canlast after several years in which calmer markets have suppressedactivity and hurt the profits they wring from tradingcommissions.
Revenues at the world's 12 biggest investment banks fell totheir lowest levels since 2008 last year, a recent surveyshowed. banks have already reported an improvement in business- Credit Suisse (SIX:CSGN) said in February that revenues in its GlobalMarkets trading division had risen 10 percent in the first sixweeks of 2018. the bond space, though, much of the rise on electronictrading venues is less to do with changes in volatility andvolumes than a switch to electronic trading because of theintroduction of MiFID II.
Bond investors have generally executed trades over thephone and many have resisted the move to electronic platformsuntil recently.
The head of trading at one of Europe's largest investors,Legal & General Investment Management's Ed Wicks, told Reutersthat its electronic trading of investment grade corporate andfinancial fixed income products had risen this year after therules came into force.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Total trading volumes Europe 2008 to 2018 Mar 6
http://reut.rs/2FkRc1a
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Tom Pfeiffer and Matthew Mpoke Bigg)