Thursday, Nov. 19, 2015

Corporate Bond Market
Global equities are higher for the fourth day in a row as markets seem comfortable with the idea of a gradual approach to policy tightening. The Stoxx Europe 600 Index climbed one percent and is the highest it has been since August 19th.  Asia is also up over one percent today.  In the US, after the S&P climbed 33.14 points yesterday, it appears that the market is going to open up this morning (DJIA +25 and S&P +5.50). Credit is flat this morning after tightening two basis points yesterday.  The IG Index is 81.65/82.15.  US Treasuries are up this morning across the curve by 1 to 15 ticks with the 10yr at 2.257%.  Oil is down $0.57 at $40.19/bbl.

Pfizer is in advanced talks to buy Allergan PLC foe as much as $380 per share, valuing the botox maker at as high as $150 billion, which would be the drug industry’s largest deal ever.

There were just two deals in the new-issue market yesterday.  MassMutual came with a $5 million gic at +80 and Horace Mann did a 10yr at +225.

Economic data: Claims, Philadelphia Fed Business Optimism (8:30am), Bloomberg Consumer Comfort, Economic Expectations (9:45am), Leading Index (10:00am).


Municipal Bond Market
Munis finished stronger on Wednesday for the third straight day as the market continues to show strong demand for the $10 billion in new issuance.  We have not seen any signs of weakening demand as deals continue to see bumps in certain maturities.  The secondary will remain quiet today with very few bidders and weak bids as the majority of buyers put cash to work in new deals.  30-day supply is weaker this morning with $6 billion on tap over the next 30 days versus $7 billion Tuesday.

Volume picked up in the trading of PR 8’s of 2035 for the first time in about two weeks.  Volume hit about $40 million after averaging close to $10 million recently.   PR benchmark 8’s of 2035 traded @ $71.50 (11.74%) on Monday after trading around $71.75 (11.68%) last week.

30-Day visible supply: $6bn


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