Monday, Nov. 23, 2015

Corporate Bond Market
Negative price action in the commodities markets continues to weigh on global equities (Eurostoxx -.39%,  FTSE -.41%, Hang Seng -.39%).  The bond market is also trading down.  The 10yr Treasury was last at 2.292%.  Economic data out later this morning should set the tone with Markit US Manufacturing PMI and Existing Home Sales numbers on deck for 10am.  Credit spreads are unchanged to marginally wider to start.  The Investment Grade Index is at +84.50/85.  Month-to-date we are at $84bn in corporate new issue, out of an estimated $90-95bn.  On the tape so far this morning is a new 30yr deal from Vodafone.

In credit news, Pzifer and Allergen are stet to combine for a total enterprise value of $160bn.  So far we have seen AGN spreads anywhere from 15 to 20bps tighter with better buyers.

 

Municipal Bond Market
Munis finished stronger Friday as the market continues to look to Treasuries for direction.  Buyers returned to the secondary after a week that was completely dominated by new issuance.  This week will be all about the secondary during the shortened holiday week.  New issuance will is expected to the lowest we have seen all year, with only $750mln scheduled. 30-day supply is stronger this morning with $6.3bn on tap over the next 30 days versus $5bn Friday.

Volume continues to pick up in the trading of PR 8’s of 2035 for the first time in about two weeks.  PR benchmark 8’s of 2035 traded @ $72 (11.66%) on Friday after trading around $71.25 (11.68%) last week.

30-Day visible supply: $6.36bn

 

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