In the first quarter of this year, as global capital markets soared, Morgan Stanleyreceived a big boost from bond sales and trading, which propelled earnings past expectations and inspired optimism that the bank’s turnround was progressing.

Sadly, the market rally, and the good feelings that came with it, evaporated in the second quarter. The US bank’s sales and trading revenues from fixed income and commodities were just $770m (excluding benefits from changes in the value of Morgan Stanley’s own debt). That is down from $2.6bn in the first quarter.

Of course, some of that 70 per cent decline can be pinned on a market downturn driven by client anxiety, in particular over Europe’s debt crisis. But not all of it. Morgan Stanley underperformed peers, too. The comparable fixed-income business across at Goldman Sachs, for example, fell just 37 per cent.