Friday, Jan. 22, 2016

Corporate Bond Market
Risk markets are rallying worldwide today as European Central Bank President Mario Draghi indicated that he may further expand stimulus as early as March, and oil rallied over 10% off its Wednesday lows and is currently trading above $31.  S&P futures are up over 1.5% today with Europe up 3% following a massive 6% move higher in the Nikkei, as expectations for additional monetary easing in Japan are also increasing.  The Investment Grade index is 3 tighter and the High Yield and Preferred markets have a much firmer tones as well.

The new issue market will have some rare Friday activity due to friendlier market conditions and as companies get past their earnings releases.  There are already four new deals announced today, including three banks (MS, Wells, RBC).  Yesterday Bank of America priced $1bn of a $25 preferred security at 6.20%, fixed for life, with a five year call.  They are opening 24.80-24.85 and the WFC 5.70% preferred issued the previous day continues to trade strong with a 24.90 bid to open the session.

On the economic front, we will get Existing Home Sales at 10AM and Manufacturing PMI at 9:45AM.


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