Friday, Aug. 28, 2015

Corporate Bond Market
Markets are opening up mixed this morning with Japanese equities trading up and European stocks trading down. Stateside equity futures are down with the DJIA Fut -130 and S&P Fut -15.75.  Oil was up over 10% yesterday, the most in six years, and was last trading $47.15/bbl.  The treasury market is rallying with the yield on the 10yr at 2.161%. Credit feels a little better to start with the IG24 index at 79/80 (+1).

It has been a full week with no new issuance in the primary market. Between the volatility and holiday absences, next week could also be a slow week.

Economic Data: Personal Income, Personal Spending and U. Mich. Sentiment are all due out today.


Municipal Bond Market
Munis are firmer this morning after trading weaker for the third straight day.  The market’s focus was on new issue yesterday with NJ EDAs and Cal St GOs free to trade. NJ EDAs firmed up throughout the day with 4’s of 2024 trading as high as a 4.28% in the morning and rallying to about 4.23% in late trading.   Attention will shift to the secondary today with all of this week’s new issue wrapped up.  30-day supply is slightly stronger this morning with $6.7bln on tap over the next 30 days versus $6bln yesterday.

Puerto Rico continues to be extremely quiet with very little volume.  We continue to see a below average amount of items for the bid with very few bonds trading.   Puerto Rico GO 8’s of 2035 saw one of the lightest volume days on record for the second straight day with only one trade greater than 1mm.   5000m bonds traded @ $72.50 (11.83%) after trading around $69 (12%) to start the week.

30-Day visible supply: $6.7bln


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