Tuesday, Jan. 6, 2015

Corporate Bond Market
The market looks to bounce back after yesterday's big equity slide (DJI -331, S&P -37.6) as oil continues to drop.. DJI fut +30, S&P fut +4, Euro +13, while the 10yr is under 2%, at the moment reaching 1.963%.. Oil continues to decline further below $50 a barrel and the falling oil prices have taken a toll on energy companies, bonds widening out on the pressure.. In Euro area news, services and manufacturing signaled economic growth slowed in the final quarter of the year, adding to the supporters for more stimulus from the ECB.. New issue calendar yesterday was nonexistent in the first real day of the year however should pick back up as the week progresses, hearing from GE Capital already this morning with a 2y FRN, 5y fixed and/or FRN.. Economic data for the day includes: Factory orders, survey -0.5%, prior release of -0.7%.

 

Municipal Bond Market
Munis kicked off the year with a stronger tone.  Buyers focused primarily on the secondary market with most this week's new issue schedule for Wednesday and Thursday. Volume seemed to pick back up after an extremely quiet two weeks to end the year.

We expect buyers to split their attention between the primary and secondary for the rest of the week. Buyers still have a significant amount of cash to put to work from large inflows seen at the end of the year.

Volume in in PR GO 8s was light to start the New Year. 1mm GOs traded @ 87.50 (9.33%) versus trading as low as $84 (9.82%) in early December.

30 Day visible supply: $8.6bln

New Issue:
$226mln Miami - Dade County, FL G.O. Refunding Bonds 2015-2035 Aa2/
$93mln Miami - Dade County, FL Public Health Trust Program 2015-2044 Aa2/
$52mln Miami - Dade County, FL Refunding Parks Bonds 2020-2030 Aa2/
$9mln Pendelton School District, KY 2016-2027 Aa3/