Aug 9 (Reuters) - Wall Street is set to pay its fixed income traders smaller bonuses this year than initially expected, according to a report by a consulting firm.
Employees in the U.S. fixed income industry are expected to receive up to a 5 percent bump in bonuses this year, compensation consulting firm Johnson Associates said in its report on Wednesday.
But that increase lags the 10 percent to 15 percent the consulting firm estimated at the end of the first quarter ended March.
Fixed income businesses, which make money from trading bonds, commodities and currencies, have seen a sharp fall in revenues in the June quarter, hurt by low market volatility.
Goldman Sachs, JPMorgan, Bank of America , Citigroup all reported declines in revenue from bond trading in the quarter. For Goldman, it was the weakest commodities result in its history as a public company.
The bond market, which saw heightened activity last year, stabilized in the first half of 2017, as markets digested major economic events such as the Brexit vote and the U.S. election.
Financial services firms are expected to broadly increase employee bonuses this year, with market activity and interest rates being key drivers, Johnson Associates' study said.
The investment banking sector is expected to see a substantial rise in incentives, mostly in debt and equity underwriting, as deal-making activity strengthens, the study added. (Reporting by Nikhil Subba and Aparajita Saxena in Bengaluru; Editing by Sai Sachin Ravikumar)