Thursday, Sept. 17, 2015

Corporate Bond Market
Global equities are mixed up for the most part overnight. The one exception was the Nikkei, which higher, closing +1.43% (Euro Stoxx +.27%, and  Hang Seng -.51%).  So far US Equities are in the red with DJIA Fut -22, S&P Fut -3.25.  Treasuries are up across the curve with the 10yr last at 2.278%.  Credit is better this morning with spreads tighter by 2-3 bps depending on the sector.  The Investment Grade Index is +1 to start at 77/77.5. Oil this morning is off $50 at $46.65/bbl.

We only saw $2.4.bln in new issue hit the tape yesterday: Autonation did 5yr and 10yr, Colonial Pipeline came with a 10yr, and Magna International did a 10yr.  All are doing better in secondary trading.

In credit news this morning, Altice NV, a European telecommunications company, agreed to acquire Cablevision Systems in a $17.7bln deal to create the fourth-largest cable provider in the US.  The consolidation of the cable industry continues as ATT acquired Direct TV in July and Charter is acquiring Time Warner.

On the economic data front: Current account (8:30am), Housing starts (8:30am), Jobless claims(8:30am) and last but not least FOMC Rate decision at 2:00 pm.


Municipal Bond Market
Munis are unchanged this morning after another day of mixed trading.  Volume remains light in the secondary as the market awaits the fed this afternoon.  We saw strong performance in the long end in the primary with deals oversubscribed and bumped.  The story was the opposite in the front end with heavy selling from customers.  This morning should be very quiet as approach this afternoons announcement.  30-day supply is slightly weaker this morning with $6.4bln on tap over the next 30 days versus $8.6bln yesterday.

PR trading picked up slightly as buyers reentered the market after two quiet trading days.  4mm PR benchmark 8’s of 2035 traded @ 74.75 (11.19%) after not trading institutionally yet this week.   We expect to continue to see very light trading in PR paper.

30-Day visible supply: $6.4bn


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