Tuesday, Dec. 23, 2014

Corporate Bond Market
The market feels a touch better this morning as New York walks in, adding to the rally we have been seeing the last few days.. DJI fut +44, S&P fut +4.5, Euro +21, while IG is -¾ (64/64½) and the 10yr is 2.172%. Clearly the slow grind into the holidays has begun with little to no secondary trading going through.

In global headlines, the UK continued its streak of expanding GDP, announcing its seventh in a row ahead of US data which is expected to show a continued pace of healthy growth. In Russia, lawmakers pushed through a bill to aid banks, one day after the central bank announced its biggest bailout of a retail lender since the ruble’s collapse began. 

M&A news: BBVA sells $1 billion stake in Citic International Financial Holdings to China Citic Bank Corp in a deal worth around $1 billion. Assured Guaranty to Acquire Radian Asset Assurance Inc. for about $810m. This was announced months ago and is simply the formal headline. Should not be a significant market mover.

Big day for economic data in the US: Durbale goods orders, survey 3.0%, prior release of 0.3%.. GDP annualized QoQ, survey 4.3%, prior release of 3.9%.. University of Michigan confidence, expected to come in at 93.5, slightly below last number of 93.8.. New home sales, 460k vs lat release of 458k.. Personal income, estimate ahead of last time, 0.4% vs 0.2%.. Personal spending, 0.5% expected vs 0.2%.

 

Municipal Bond Market
Munis were extremely quiet to start the week. Volume in the secondary was light with most trade occurring in the morning. We expect to see the same today.

Volume in in PR GO 8’s was strong to start the week with 33mln bonds changed hands compared to just 10mm on Friday. Benchmark GOs traded around 85.50 (9.634%). Bonds have traded in $85-$86.50 range over the past week. 

30 Day visible supply: $4.1bln

New Issue:
No notable deals today.