Monday, Dec. 22, 2014

Corporate Bond Market
Returning from the weekend the market feels unchanged to a touch stronger as DJI fut +40, S&P fut +3.5, Euro +27, while IG is unchanged (64/64½) and the 10yr is 2.183%.. Saudi Oil minister told a conference over the weekend that he is confident crude prices will rebound as demand recovers. The Chinese government has offered support for Russia, including expanding a currency swap between the two nations as President Vladimir Putin seeks to shore up the ruble without depleting foreign-exchange reserves. 

In M&A news: Caesars Entertainment and Caesars purchase company have agreed to a merger.. OAO Rosneft repaid $7 billion in debt and said it is generating enough dollars to meet the obligations taken on to buy TNK-BP last year and become the world’s largest traded oil producer. New issue will continue to be non existent into the end of the year and secondary trading will continue to slow as we hit the holiday season.. Economic data for the day includes: Existing home sales, survey 5.20M vs an estimate of 5.26M.

 

Municipal Bond Market
Munis should be quiet this week heading into the holiday. New issue is light with only $576mln scheduled. Munis continue to see huge fund inflows with little new issuance. As a result, we expect to see some of this new cash flow into the secondary. 

Muni funds continue to see large amounts of cash flowing in. Funds saw inflows of $611mln versus a four-week moving average of $510.8mln. We continue to expect to see demand for bonds in the secondary with such light new issue calendar over the next 30 days (3.6bln) and massive amounts of cash to put to work.

Volume in in PR GO 8’s was light heading into the weekend. Benchmark GOs traded around 85.375 (9.649%). Bonds traded in $85-$85.50 late in the week. 

30 Day visible supply: $3.1bln

New Issue:
No notable deals today.