Tuesday, August 15, 2017

Corporate Bond Market
Global equity markets are mostly higher to start the session. Asian stocks are in the green with the exception of the NIKKEI 225 which is down 10 points. The EURO STOXX 50 is up 9 points, FTSE up 32 points, and the DAX is up 19 points. US stock futures are all higher this morning with the DOW up 51 points, S&P up 5 points, and NASDAQ 100 up 17 points. With equities in the green, gold continues to fall and the VIX has dropped below 12. Fed President Dudley’s hawkish comments yesterday afternoon bumped Treasury yields up 1.5-3.5bps across the curve. Right now the 10yr stands at 2.271% which is up 5.3bps from yesterday.

Credit indices are tighter to start the week. In the investment grade space we saw $4.1bn priced from 5 domestic issuers across 7 tranches bringing August total volume to $66.105bn. Amazon finished investor meetings yesterday and is expected to announce a multi-tranche transaction that could total $16bn. Deals from E*Trade and VMware are also expected this week. In high yield space ClubCorp and Big River Steel are set to price today after AES Corporation and Staples priced yesterday. Aside from export/import prices, empire manufacturing, and retail sales, no major economic news is scheduled for today.

Municipal Bond Market
Munis finished mixed on Monday as traders prepare for $6.7bn of new issuance for this week. Despite treasuries being weaker, the yield on the 10yr benchmark muni GO was unchanged from 1.88%. Today we will see Mecklenburg County, N.C, sell $225 million of triple-A rated GO public improvement bonds in the competitive arena. In addition, the University of Alabama Board of Trustees will competitively sell $199.36 million of general revenue bonds in 3 separate offerings in a deal rated AA by S&P and Aa2 by Moody’s.

Monday, August 14, 2017

Corporate Bond Market
Global equities are all in the green to start the session as fears of an imminent nuclear war with North Korea begin to abate. In Europe, the FTSE 100 is up 44.5 points, the DAX up 125 points, and the Euro Stoxx 50 up 40 points. Asian equities are also slightly higher with the Hang Seng up 6 points and the NIKKEI 225 up 20 points. US equity futures are up sharply and treasury yields are 1-3bps higher across the curve. Right now, people are talking about how U.S. Officials say another Korea War is NOT around the corner and how Trump has yet to denounce the nationalists in the Charlottesville incident. Amazon is also in the news today after hiring banks to hold fixed income calls for investors.

With respect to credit, high-grade bond sales are said to top $40bn for the second time in four weeks bringing August volume to $66.1bn and YTD volume to $1.093 trillion.  British American Tobacco (BAT) led issuance as it priced $17.25bn across 8 tranches. We’re expecting to see $14.675bn in issuance today and $19.475 tomorrow. Investment grade 5 years out is tighter and high-yield 5 years out is also slightly tighter this morning.

Municipal Bond Market
Primary muni market volume is expected to increase to $6.7bn from a revised total of $5.57bn sold last week. The biggest deal of the week will be Maryland who will issue $1.34bn in 2 competitive sales. The deal, which is rated AAA by all 3 agencies, will include $550 million of Series A and $792.825 million of Series B GO and local facilities bonds. The largest negotiated deal of the week will come from the city and county of Honolulu, HI. On Wednesday Merrill will price the $411 million of Honolulu GO bonds which are rated Aa1 by Moody’s and AA-plus by S&P. For reference, the muni-to-treasury ratio was 86% on Friday as the yield on the 10-year benchmark muni GO was flat at 1.88%.

Thursday, August 10, 2017

Corporate Bond Market Good Morning – Global equity markets are all negative to start this morning as geopolitical tensions between the US and North Korea have not subsided. Gold is up again, treasury yields are lower, both high yield and IG are wider, and the VIX is trading through 12 for the first time in what feels like forever. In Asia, we’re seeing the HANG SENG -16 points, NIKKEI -80 points, and CSI 300 -18.5 points. Europeans equities are also down with the FTSE -46.5 points and the Euro Stoxx 50 -16 points.

 

Stock-index futures in the US are lower with the DOW -53 points & S&P -9.5 points. The yield on the 10yr UST is down about 1 bp to 2.231% and the 30yr is at 2.814%. In Economic news, we’ll see PPI and weekly jobless claims numbers.

Muni market

Munis finished stronger on Wednesday as rates dropped and supply was limited. With Treasuries rallying, we saw the yield on the 10-year benchmark muni GO fell about 3 bps to 1.90% bringing the 10-year muni-to-Treasury ratio to 84.9%. One of the bigger deals took place in the competitive arena where the Florida State Board of Education sold $144.23 million of full faith and credit public education capital outlay refunding bonds. JP Morgan priced the deal which was rated Aa1 by Moody’s and AAA by S&P and Fitch. JP Morgan won the bonds with a TIC of 2.72%. The deal was simple and came to market as 5’s yielding 0.77% in 2018 and as 3.5’s yielding 3.16% in 2037.

Wednesday, August 9, 2017

Corporate Bond Market

Good Morning – Global equity markets are all negative to start this morning. Gold, the Japanese yen, and bonds are higher as tensions continue to heat up with North Korea. In Asia, we’re seeing the HANG SENG -15 points, NIKKEI -40 points, and CSI 300 +2.5 points. Right now, both Asian and European credit spreads are slightly wider.

Stock-index futures in the US are lower to start the morning with the DOW -51 points & S&P -11.25 points. The yield on the 10yr UST is down 2.5 bps to 2.237% and the 30yr is at 2.819%. Today the Treasury is set to sell $23bn of 10y notes. Corporate spreads will be opening wider by 1.1 bps as yesterday saw $19.475b price from 5 issuers across 13 tranches. High yield is also slightly wider as Cable & Wireless, Tesla, Parexel, ClubCorp, and Weekley Homes are expected to come to market this week. In Economic news, no relevant data is scheduled for today.

Municipal Bond Market

Munis finished mixed for a second straight day as traders saw the New York City Transitional Finance Authority sell $1.5 billion of fiscal 2018 future tax secured subs in 6 separate offerings. Merrill won the $411.95 million of tax-exempts with a true interest cost of 3.74%. The issue came to market as 5’s to yield 2.93% in 2040 and 4’s to yield 3.36% in 2045. RBC won the next largest tranche of $406.82 million subordinate tax-exempts with a true interest cost of 3.63%, which was priced as 5’s to yield 2.66% in 2033 and 2.86% in 2039.

 

Tuesday, August 8, 2017

Good Morning – Global equity markets are mostly negative to start this morning. Gold is up and the Euro is extending its gains as European stocks pare early session losses. In Asia, we’re seeing the HANG SENG -9 points, NIKKEI -20 points, and CSI 300 -2 points. Right now, both Asian and European credit spreads are slightly tighter.

Stock-index futures in the US are slightly lower to start the morning with the DOW -21 points & S&P -4 points. UST yield curve is unchanged with the 10yr at 2.262% and the 30yr at 2.845% ahead of today’s $24b 3y notes auction. USD swap spreads ended tighter across the curve with the 30Y tenor down around 0.8 bps. Corporate spreads will be opening wider by 1.4 bps as 14 deals priced yesterday for a total of $14.675 bn. In the high yield space, there are 6 deals on the calendar including Tesla and Parexel.

In Economic news, no relevant data is scheduled for today.

In the muni world, top notch municipal bonds finished mixed as the Cleveland Clinic Health System Obligated Group dominated headlines. JP Morgan priced $824.23 million of Series 2017A tax-exempt hospital refunding revenue bonds in a deal rated Aa2 by Moody’s. The bonds were priced for retail as 3’s to yield from 0.96% in 2019 to 5’s yielding 3.42% in 2039. A 2043 term bond was priced as 4’s to yield 3.50%.

Monday, August 7, 2017

Municipal Bond Market

Munis finished weaker on Friday as traders waited for $7.32 bn to hit the market this week. Of the $7.32 bn, $4.77 billion is of negotiated deals and $2.55 billion is of competitive sales. One of the big deals of last week was Bay Area Toll Authority of Calif.’s $1.4 billion bond offering. Merrill priced the deal which consisted of $552.09 million of senior bonds and $852.02 million of index-rates and fixed-rated subordinate bonds. The subs were rated A1 by Moody’s and AA- by S&P while the seniors were rated Aa3 by Moody’s and AA by S&P. It’s also worth noting that muni bond funds saw another week of inflows.

Tuesday, August 1, 2017

Municipal Bond Market

Munis finished unchanged on Monday as traders expect $7.2 bn of new supply to hit the market this week. Bank of America is set to price the Bay Area Toll Authority of California’s $1.1 billion revenue bond offering for the San Francisco Bay Area Toll Bridge today for institutions. The deal, which is rated Aa3 by Moody’s and AA by S&P, consists of $550 million of senior bonds and $550 million of Series 2017-I index-rates and Series 2017 S-7 fixed-rated subordinate bonds. Today we will also see Wells Fargo Securities price the Washington Metropolitan Area Transit Authority’s $496.5 million of Series 2017B gross revenue transit bonds in a deal rated AA-minus by S&P and Fitch. Tomorrow’s primary market looks a little quieter. Bank of America is set to price $222 million of North Carolina grant anticipation revenue vehicle refunding bonds in a deal rated AA by S&P and A2e by Moody’s.

Monday, July 24, 2017

Corporate Bond Market

US Equity Futures are off to start the week with the DJ Futures -16, S&P Futures -2.75 and NASDAQ Futures -6.75. The global tone is mixed with European equities trading lower and Asian markets mixed. US Treasuries are a bit weaker with yields on the 10yr last at 2.241% and crude oil is stronger, last quoted $46.10/barrel. Credit is a tighter with the Investment Grade Index showing 39.50/4.83 and cash is also stronger.

In credit news, last week’s primary market saw some heavy volume with a total of $52.45b priced in Investment Grade Credit. The monthly tally has risen $96.44b, $79.94b sans SAS. For 2017, we have reached $983.025b; $794.085b sans SAS. There are deals set to price from The Industrial Bank of Korea, Ashton Woods and Odea Bank.

On the earnings front, Scientific Games and Haliburton outperformed analysts’ estimates for Q2 2017.

In economic data, US Manufacturing PMI and Existing Home Sales will be reported this morning.

Monday, July 17, 2017

Corporate Bond Market

US Equity Futures are up higher to start the week with the DJ Futures +16, S&P Futures +2.50 and NASDAQ Futures +12.50. The global tone is mixed with European equities stronger and Asian markets mixed. US Treasuries are stronger with yields on the 10yr last at 2.307% and crude oil unchanged last quoted $46.54/barrel. Credit is a bit tighter with the Investment Grade Index showing 40.65/41.99 and cash is also stronger.

In credit news, last week’s primary market saw a total of $36.74b; $26.49b sans SAS priced in Investment Grade Credit. The monthly tally has risen to $43.99bn; $32.24bn sans SAS. For 2017, we have reached $930.575b; $746.385b sans SAS. There are deals set to price from: Citi, JP Morgan, Wells Fargo, Greenko, Kyobo Life and Kingdom of Sweden following the blackout period.

On the earnings front, the first wave of banks reported late last week.  Citigroup, Wells Fargo, PNC and JPM all reported earnings that beat analysts’ estimates for Q2. On the other end, First Republic and Blackrock underperformed in Q2.

In economic data, July’s Empire Manufacturing Survey will be reported this morning.

Monday, July 10, 2017

 

Corporate Bond Market

US Equity Futures are mostly higher to start the week with the DJ Futures -12, S&P Futures +1 and NASDAQ Futures +14. The global tone is mixed with overseas equity markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.37% and crude oil is down; last quoted $43.75/barrel. Credit is a bit tighter with the Investment Grade Index showing 42.03/45.36 and cash is slightly weaker.

In credit news, last week saw a total of $7.25bn priced in new issue credit. The annual tally in Investment Grade Credit is $893.835b straggling behind 2016 by 3%; stripping sovereigns YTD volume $719.895b, down 7% y/y. There are deals set to price from Nissan, ORIX and NongHyup Bank with more expected to announce. This week is expected to bring at least $20bn. US Bank earning’s season begins Friday with JPM, Citi and Wells Fargo reporting.

In economic data, June’s Labor Market Conditions Index Change will be announced this morning with May’s Consumer Credit this afternoon.

Wednesday, July 5, 2017

Corporate Bond Market

US Equity Futures are fairly unchanged to start the day with the DJ Futures +7 and the S&P Futures +2.25. The global tone is mixed with overseas equity markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.337% and crude oil is down; last quoted $46.56/barrel. Credit is a bit wider with the Investment Grade Index showing 42.92/44.25 and cash is also weaker.

In credit news, June saw $82.675b priced in new issue Investment Grade Credit. The annual tally for Investment Grade Credit is $714.145b and $143.34b in High Yield. There are no deals set to price today as of yet. This week is expected to be a light in the primary market amidst the shortened holiday week.

In global news, the UN is set to meet later today about North Korea’s Intercontinental Ballistic Missile test. 

In economic data, May’s Factory, Durable and Capital Goods orders will be reported this morning followed by the FOMC Meeting Minutes scheduled to be released this afternoon.

Tuesday, June 28, 2017

Corporate Bond Market

US Equity Futures are off to start the day with the DJ Futures -25 and the S&P Futures -3.50. The global tone is mixed with European equities weaker and Asian equities mixed through the overnight. US Treasuries are weaker with yields on the 10yr last at 2.167% and crude oil is up; last quoted $43.87/barrel. Credit is tighter with the Investment Grade Index showing 42.4/43.7 and cash is also stronger.

In credit news, yesterday’s primary market saw $3.65bn priced from 7 issuers in Investment Grade Credit; June’s tally is up to $72.225bn. 3 deals pried in High Yield for $2bn; YTD issuance totals $138bn. From yesterday’s new deals, we are active in CBS, Sirius, Athene Global Funding and Indiana Michigan Power.

In other corporate news, Google received a record 2.4 billion-euro ($2.7 billion) fine from European Union enforcers who say the search-engine giant tilted marks to prevent smaller shopping search services.  

Municipal Bond Market

Munis finished stronger on Monday as the yield on the 10-year benchmark GO fell one basis point to 1.85%. While there were not any significant deals that priced yesterday, the upcoming calendar is estimated to be at $6.82 billion ($5.16 billion of negotiated deals and $1.66 billion of competitive sales). Today Morgan Stanley will price the Dormitory Authority of the State of New York’s $1.72 billion of general purpose state personal income tax revenue bonds for retail investors in a deal rated Aa1 by Moody’s and AAA by S&P. We will also see Wells Fargo price the Missouri Health and Educational Facilities Authority’s $375 million of taxable educational facilities revenue bonds for the Washington University in a deal rated Aa1 by Moody’s.

Thursday, June 22, 2017

Corporate Bond Market

US Equity Futures are down to start the session with the DJ Futures -13 and the S&P Futures -1.75. The global tone is mixed with European and Asian equity markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.15% and crude oil is up; last quoted $42.75/barrel. Credit is wider with the Investment Grade Index showing 44.78/46.06 and cash is tighter.

In credit news, yesterday’s primary market saw $11.45bn priced from 5 issuers in Investment Grade Credit; June’s tally is up to $68.075bn. YTD High Yield issuance totals $135bn. From yesterday’s new deals, we are active in EDP Finance, Owens Corning and Suntory Holdings.

In economic data, Initial Jobless Claims rose to 241,000 outpacing survey estimates of 240,000 and Continuing claims also grew larger than survey estimates. Later, FHFA Monthly House Price Index will be reported followed by Consumer Comfort and Economic Expectations.

Municipal Bond Market

For a third straight day, munis finished unchanged as the biggest non-rated deal of the year finally came to market. Goldman was given the opportunity to price Wisconsin’s Public Finance Authority’s $1.09 billion revenue bonds for the American Dream Project in the New Jersey Meadowlands. According to market sources, the deal was oversubscribed by about 1.5 times in spite of a week-long delay to price the deal. The $800 million of tax-exempt limited obligation PILOT revenue bonds were priced at par to yield 5% in 2027, as 6.5’s to yield 6.25% in 2037, as 6.75’s to yield 6.375% in 2042, and as 7’s to yield 6.625% in 2050. The $268.4 million of tax-exempt bonds were priced as 6.25’s to yield 6.385% 2027 and as 6.75’s to yield roughly 6.861% in 2031. Last but not least, the $18.6 million of taxable bonds were priced at par to yield 5.625% in 2024.

Wednesday, June 21, 2017

Corporate Bond Market

US Equity Futures are down to start the session with the DJ Futures -12 and the S&P Futures -4.50. The global tone is mixed with European equities trading down and Asian markets mixed through the overnight. US Treasuries are a bit weaker with yields on the 10yr last at 2.16% and crude oil is down; last quoted $43.61/barrel. Credit is wider with the Investment Grade Index showing 43.58/44.86 and cash is tighter.

In credit news, Monday’s primary market saw $1.5bn priced from 3 issuers in Investment Grade Credit; June’s tally is up to $56.625bn. In High Yield, First Quality Finance and Carrols Restaurant priced new deals yesterday. YTD High Yield issuance totals $134.8bn. From yesterday’s new deals, we are active in Jackson National Life and First Quality Finance. Today’s primary market is hoping to rebound from a light couple sessions to start this week. There are deals from Charter, Westpac and Suntory Holdings on the calendar for today’s business.

In economic data, MBA Mortgage Applications grew 0.6% last week and May’s Existing Homes Sales will be reported this morning.
 
Municipal Bond Market

Munis finished unchanged for the second day in a row despite the 10-year Treasury declining a couple basis points to 2.15%. Traders saw some competitive bond deals come to market including the states of Georgia and Massachusetts and Chicago's O'Hare airport. $1.4bn Georgia GO’s were sold in 4 separate offerings all rated triple-A by Moody’s, S&P, and Fitch. Merrill won the $430.53 million of Tranche 2 GO’s with a true interest cost of 3.06% in an issue priced as 5’s to yield from 1.94% in 2028 and 3’s to yield 3.261% in 2037. Morgan Stanley won the $358.11 million of Tranche 1 GO’s with a true interest cost of 1.46% in addition to winning the $352.45 million of refunding GO’s with a true interest cost of 1.899%. Unfortunately, pricing information on these deals was not available. Last but not least, Wells Fargo won the $273.45 million of taxable GOs with a true interest cost was 2.99%. The issue was priced as 4’s to yield 1.25% in 2018 to 3.15% at par in 2033 and a 2037 maturity was priced at par to yield 3.30%.

Tuesday, June 20, 2017

Corporate Bond Market

US Equity Futures are slightly weaker to start the session with the DJ Futures -13 and the S&P Futures -2.50. The global tone is mixed with European equities trading mixed and Asian markets lower through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.17% and crude oil is down; last quoted $43.06/barrel. Credit is tighter with the Investment Grade Index showing 42.84/44.11 and cash is wider.

In credit news, Monday’s primary market saw $6.225bn priced from 5 issuers in Investment Grade Credit; June’s tally is up to $55.125bn. In High Yield, Intelsat and Surgery Center priced new deals yesterday. YTD High Yield issuance totals $134.36bn. From yesterday’s new deals, we are active in Argentina and FirstEnergy. Today is expected to be another active day in the primary market with deals announced from: First Quality Finance and Jackson National Life

Municipal Bond Market

Despite Treasuries being weaker on Monday, munis finished the day unchanged. All eyes were on the New York City Transitional Finance Authority’s $850 million of tax-exempt secured subordinate bonds which were brought to market by Loop Capital. The deal, which was rated Aa1 by Moody’s and AAA by S&P and Fitch, was priced for retail as 3’s to yield from 1% in 2019 to about 3.317% in 2038, a 2043 maturity was priced as 5’s to yield 2.96%, and a 2044 maturity was priced as 4’s to yield 3.27%. This week’s calendar is $11.8 billion which is composed of $7.74 billion in negotiated deals and $4.04 billion of competitive sales.

Monday, June 19, 2017

Corporate Bond Market

US Equity Futures are strong to start the week with the DJ Futures +76 and the S&P Futures +8. The global tone is mostly positive through the overnight with European equities trading higher and Asian markets mixed. US Treasuries are slightly higher with yields on the 10yr last at 2.143% and crude oil is also up; last quoted $44.87/barrel. Credit is slightly weaker with the Investment Grade Index showing 43.09/44.36 and cash is a bit tighter.

In credit news, last week’s primary market saw just shy $15bn priced from domestic issuers in Investment Grade Credit; June’s tally is up to$48.9bn. The consensus for June is about $97bn in total new issue credit. From last week’s new deals, we are active in BrightHouse Financial. This week is expected to be an active week in the primary market with deals already announced from Surgery Center and Werner Finco. Consensus estimates for this week is north of $25bn.
 

Wednesday, June 14, 2017

Corporate Bond Market

US Equity Futures are up to start the session with the DJ Futures +48 and the S&P Futures +4. The global tone is mixed with European equities trading higher and Asian markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.192% and oil is weaker, last quoted $46.06/barrel. Credit is stronger with the Investment Grade Index showing 41.80/43.04 and cash is also tighter.

In credit news, yesterday’s primary market saw $1.8bn priced from domestic issuers and $4.643b total in Investment Grade Credit; June’s tally is up to $50.243bn. From yesterday’s new deals, we are active in: AEL, Apple, GXP and Republic of Chile. Today will be a quiet day in the primary market with the Fed Rate announcement coming this afternoon.

In economic data, there are a few key announcements scheduled for today. First, Mortgage Applications grew 2.8% last week. May’s Consumer Price Index with me announced this morning along with Retail Sales and Business Inventories. Finally, The Fed’s Rate Decision will be announced this afternoon.

Monday, June 12, 2017

Corporate Bond Market

US Equity Futures are down to start the week with the DJ Futures -33 and the S&P Futures -6. The global tone is negative with overseas equities trading lower through the overnight. US Treasuries are a bit weaker with yields on the 10yr last at 2.207% and oil is stronger, last quoted $46.53/barrel. Credit is weaker with the Investment Grade Index showing 43.269/44.60 and cash is also wider.

In credit news, last week’s primary market saw $18.55bn priced in Investment Grade Credit. June’s tally is up to $35.15bn. There is a new deal announced from UniCredit and Korea East-West Power to start the session.

In other credit news, former General Electric CEO Jeffrey Immelt has stepped down and will be replaced by GE’s health-care head, John Flannery. Immelt served 16 years as CEO and was as of recently facing pressure from shareholders as the stock has declined over 12% this year. GE common stock shares are up over 2.5% in the premarket based on this news.

Wednesday, June 7, 2017

Corporate Bond Market

US Equity Futures are mixed to start the day with the DJ Futures -1 and the S&P Futures flat. The global tone is positive with overseas equities trading higher through the overnight. US Treasuries are a bit weaker with yields on the 10yr last at 2.152% and oil is down, last quoted $47.89/barrel. Credit is weaker with the Investment Grade Index showing 43.09/44.42 and cash is tighter.

In credit news, Monday’s primary market saw $5.65bn priced in Investment Grade Credit. June’s tally has crossed $30bn. From yesterday’s new deals, we active in: Union Electric, Harley Davidson, Coach and KeyBank. There is a deal announced from KFW for today’s business.

In economic data, Mortgage Applications grew 7.1% last week.  

Municipal Bond Market

Munis joined Treasuries in finishing stronger on Tuesday as the first of the week’s supply came to market. Yields on both the 10-year and 30-year benchmark muni GO decreased three basis points to 1.83 and 2.66% respectively. Yesterday Siebert Cisneros Shank priced Chicago’s $396.74 million of wastewater transmission revenue bonds in a deal rated A by S&P and AA-minus by Fitch. The $181.14 million of Series 2017A project bonds came to market as 5’s to yield 1.53% in 2020, 3.65% in 2037, and 3.74% in 2047. The Series 2017A project bonds also included a 2042 term bond priced to yield 3.40% with a 5.25% coupon and a 2052 term bond priced to yield 3.91% with a 4.00% coupon. The $215.6 million of Series 2017B refunding bonds were priced as 5’s to yield 1.13% in 2018 and 3.66% in 2038. We also saw the Metropolitan Washington Airports Authority come to market with a $523.785 million deal that was priced as 1’s to yield 0.85% in 2017 and 5’s to yield 3.06% in 2037. Two term bonds were also priced as 5’s to yield 3.12% in 2042 and 3.18% in 2047. This deal was priced by RBC Capital Markets and rated Aa3 by Moody’s and AA-minus by S&P and Fitch. With respect to Puerto Rico, Judge Swain has agreed to rule on the “default” status of the COFINA bonds and even set deadlines for a quick ruling in mid-July.

Tuesday, June 6, 2017

Corporate Bond Market
US Equity Futures are weak to start the session with the DJ Futures -48 and the S&P Futures -6. The global tone is negative with overseas equities trading lower through the overnight. US Treasuries are rallying with yields on the 10yr last at 2.136% and oil is down, last quoted $47.33/barrel. Credit is weaker with the Investment Grade Index showing 43/44.33 and cash is wider.

In credit news, Monday’s primary market saw $7.85bn priced in Investment Grade Credit. June’s tally is at $24.45bn. From yesterday’s new deals, we active in: Air Lease, Autodesk, Atmos Energy, Dr Pepper Snapple, Nokia, National Bank of Canada and San Diego G & E. There is a deal announced from Sempra Energy for today’s business.

In economic data, April’s Job Openings will be reported this morning.

Municipal Bond Market
Munis finished Monday mostly unchanged as traders waited for $7.8 bn of new supply to come to market. The yield on the 10-year benchmark GO was flat from 1.86% on Friday despite yields on the 10-year Treasury rising to 2.18% from 2.16%. Today we will see RBC Capital Markets price the Metropolitan Washington Airports Authority’s $533.79 million of airport system revenue refunding bonds in a deal rated Aa3 by Moody’s and AA-minus by S&P and Fitch. Barclays Capital is also set to price the East Bay Municipal Utility District, Calif.’s $453.84 million of water system revenue green bonds and refunding bonds in a deal rated Aa1 by Moody’s, AAA by S&P, and AA-plus by Fitch. Last but not least, we will see Siebert Cisneros Shank price the city of Chicago’s $399.71 million of project and refunding wastewater transmission revenue bonds in a deal rated A by S&P and AA-minus by Fitch.