MarketAxess beats Q1 profit estimates as trading in credit, Eurobonds hits record

May 7 (Reuters) - Bond trading platform MarketAxess Holdings beat estimates for first-quarter profit on Tuesday, helped by record activity in total credit and Eurobonds.

MarketAxess' credit segment includes bonds which are high-grade, high-yield and municipal-issued, among others.

High-grade or investment-grade bonds typically have a lower risk of default and smaller returns compared with high-yield or junk bonds.

WHY IT'S IMPORTANT

Expectations of interest-rate cuts changed rapidly during the first quarter and induced significant volatility in the global bond markets.

The trajectory of potential rate cuts in the U.S., euro zone and emerging markets continues to remain cloudy as central banks weigh whether inflation has declined meaningfully and underlying price pressures have slowed.

Meanwhile, higher interest rates have also raised the demand for safe-haven bonds across Treasury and corporate segments as they offer investors steady risk-free returns.

CONTEXT

MarketAxess operates an electronic trading platform allowing institutional investors and broker-dealer firms to trade corporate bonds and other fixed-income securities.

Exchange operators typically do better when the markets are volatile as investors rejig portfolios more actively to cut risk, helping drum up trading volume.

BY THE NUMBERS

MarketAxess' net income of $1.92 per share in the three months ended March 31 beat analysts' estimates of $1.87 per share, according to LSEG data.

Revenue in the first quarter rose to $210 million, compared with $203 million in the year-ago quarter.

It posted record quarterly total credit average daily volume (ADV) of $15 billion, up 9.2% from a year earlier.

MarketAxess's Eurobonds ADV increased 10.6% to a record $2 billion and emerging markets ADV of $3.6 billion climbed 17.3% in the first quarter.

(Reporting by Sri Hari N S and Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)