Tuesday, Jan. 19, 2016

Corporate Bond Market
Firmer tone this morning following Friday’s sell-off.  Equity futures are up in US with the DJIA Fut +211 and S&P Fut +25, after a strong overnight session in both Europe and Asia.  Treasuries are selling off a bit with the 10yr last at 2.057%.   There was a welcome respite for the energy sector with oil off the lows at $29.75 this morning.  Credit is generally tighter to start with cash spreads 2-5bps better.  The Investment Grade index is -3 at 107/107.5.   Hybrids and preferreds are up anywhere from +.125 to +50.  The financial sector no doubt buoyed by strong numbers out of Bank of America and Morgan Stanley to kick things off this morning.

In economic news,  NAHB Housing Market Index (10:30am), Total Net TIC Flows (16:00pm), and Net Long-term TIC Flows (16:00pm) are due to be released today.


Municipal Bond Market
Munis are weaker this morning after a strong trading day heading into the three day weekend. We expect to see last week’s trend of extremely strong demand in the primary with very little secondary flow continue into this week.  Muni funds added $995mln in new cash for the week ended January 13th.  Highlights of this week’s new issue calendar include $529mln Washington ST GOs, $372mln DC Waters, and $300mln from the Triborough Bridge Authority. Authority.  30-day supply is slightly stronger this morning with $9.5bn on tap over the next 30 days versus $8.5bn Friday.

30-Day visible supply: $9.5bn


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