Welcome to the second edition of Fixed Income Leaders Pulse, a new monthly briefing built for our FILS community. Each month, we will unpack the themes shaping fixed income trading through exclusive research and our event data, taken straight from the leaders who are shaping the industry.
In the previous edition, we touched on the findings from our 2026 FILS USA Playbook, which reiterated that fragmented liquidity and pricing inconsistency across venues is the single biggest obstacle to price transparency. This sentiment naturally makes provenance the central theme for creating trust in fixed income’s evaluated pricing. It also establishes that price traceability via full lifecycle transparency matters much more for achieving valuation confidence, than just the amount of data obtained.
Your Monthly Pulse
September 2026
FROM THE FILS USA PLAYBOOK 2026
The inefficient pricing of private credit makes it the biggest pricing challenge in fixed income.
32% of fixed income leaders selected private credit as their main pricing challenge; while 49% call it the most inefficiently priced segment.
This sentiment brings the complexity of illiquid market pricing to light, where the limited availability of traceable quotes from past trades force reliance on evaluated prices. But these price estimates may still not guarantee executable market liquidity in reality: an evaluated price is a best estimate, not proof the market would actually trade there.
Despite advances in price transparency, confidence remains difficult to establish across less liquid areas of fixed income, with private credit perhaps the sharpest illustration. When observable transactions are scarce, a defensible valuation depends on more than a price point. It requires trusted market inputs combined with high-quality reference data, instrument documentation, borrower information, corporate actions and credit events. Crucially, those inputs also need to be traceable, allowing users to understand, validate and ultimately defend the valuation.
This is where technology, and increasingly AI, can make a meaningful difference. Rather than replacing valuation expertise, it can help identify relevant comparables, filter noisy market data and connect fragmented information, giving evaluators a stronger evidence base on which to make pricing decisions.
Cite private credit as their biggest pricing challenge
Call private credit the most inefficiently priced segment in credit
It's also why pricing vendors can land on different numbers for the same instrument: each is estimating from an incomplete set of inputs. The desks that can trace their own valuation back to source are best placed to defend it when a vendor's price doesn't match.
Thus, the availability of pricing data alone doesn’t infer its suitability for increasingly complex valuation workflows.
Provenance is what closes that gap.
“Even the most sophisticated models, expertise and methodologies will not produce trusted valuations for illiquid bonds in isolation. Broad sector coverage, market-wide trade and quote data and accurate, timely terms and conditions are essential.
When direct market observations are limited, provable and defensible pricing depends on deep security-level data and observable market activity from comparable, more liquid instruments. In practice, valuations for illiquid assets are derived from price discovery across the broader market."
Swati Bhatia Head of Fixed Income SIX Financial Information
FROM FILS USA 2026
The pricing confidence issue isn't just limited to private credit.
FILS USA 2026 attendees have pointed towards the shortcomings of the broader loan market reference data.
This is mainly due to the refinancing information lag and the excessive number of identifiers for each instrument.
Encouragingly however, the municipal bond market shows a brighter outlook, where two thirds of fixed income leaders agree that technology will finally solve the municipal market's fragmentation problem - at least within the well-rated AA/AAA segment, where AI could substantially reduce headcount. Meanwhile, the inherent complexity of local government financing keeps the market fragmented. In this respect tech may merely improve UX, while the underlying fragmentation issue persists.
Structured credit products, on the other hand, were recently observed to move from niche to core, as their floating-rate exposure remains favored amid the current reflationary/geopolitical risk scenario. That is despite the growing concentration exposure tied to AI data center financing, where issuers use CMBS, ABS and corporate markets simultaneously, that creates hidden correlation risk which is hard to spot at the individual deal level.
Residential credit in the form of RMBS is now viewed as one of the strongest risk-adjusted opportunities, as a result of growing home prices since Covid.
What does it actually take to trust a price when there are no recent trades to rely on?
In this special episode of the FILS Pulse Check podcast, Megan Smith is joined by Ryan Etherington from SIX and Andrew Draper from MarketAxess to explore the challenges of pricing illiquid credit and what makes an evaluated price truly defensible.
The conversation explores the importance of high-quality market data and data provenance, what happens when direct market observations are limited, and why different pricing vendors can arrive at different valuations for the same instrument.
They also discuss pricing challenges across municipal bonds, high yield and structured products, before looking at what good pricing should ultimately deliver: valuations that are explainable, trustworthy and consistent.
SAVE THE DATE
JUNE 14-16, 2027
FILS USA 2027: These conversations...live
Everything in this issue is on the agenda at FILS USA.
The trust gap, the case for provenance, the pull between chasing more data and trusting what you already have. FILS unites the most senior buy-side professionals in fixed income to develop strategies for navigating exactly these challenges, from data and pricing to AI and liquidity.
Next year's edition brings that community back together for three days of unscripted debate shaping the future of fixed income.
THE WESTIN COPLEY PLACE HOTEL
BOSTON, MA
Attendees
Buy-side attendees
Buy-side speakers
On-site networking hours
COMING SOON...
OCTOBER 2026
The next edition of the FILS Europe Playbook
We surveyed senior fixed income leaders across Europe's largest buy-side markets on liquidity, data and AI readiness heading into 2030.
The same data and trust challenges this issue covers are playing out across European desks too. Asked what's standing in the way of execution today, most respondents did not point to data quality first. They pointed to something more basic, simply knowing where the best liquidity actually is. The full findings will be published in early October.
IN NEXT MONTH'S EDITION...
Building AI on Trusted Data.
How can we place sufficient confidence in AI-enabled trading decisions through accurate, traceable and accessible data?
