Thursday, Jan. 28, 2016

Corporate Bond Market
Stock futures are trading up at the moment after another slew of good earnings hits the tape (DJIA Fut +39, S&P Fut +6.5).  Global equities were mixed overnight with Asia trading up and Europe trading down.  Treasuries are selling off a bit with the 10yr last at 2.005%.  Oil is rebounding nicely at $32.85 and helping underpin the positive tone in the markets.  Credit is opening unchanged to slightly better.  The investment grade index was last 103.75/104.75  which is roughly -0.75. 

Limited supply in the primary market is no doubt helping support levels here.  This week has seen only$5bn price in Corporates out of an estimated $15-20bn.  The desk is expecting 1-2 benchmark transactions today.  In credit news, Freeport McMoran (FCX) was downgraded four notches by Moodys to B1 with negative outlook.  Bonds are down 3-4 points to start.  Deutsche Bank is in the headlines again with a 4Q2015 loss.  Ford was one of the companies that reported monster earnings this morning.  Look for that name to trade tighter.

In economic news,  Initial Jobless Claims (8:30am), Continuing Claims (8:30am), and Durable Goods Orders (8:30am) are due to be released today.


Municipal Bond Market
Munis are stronger this morning after another quiet trading day in the secondary market. We continue to see buyers looking to the new issue market to fill inquiry needs and giving the secondary very little thought.  In credit news, Chicago BOE delayed the sale of $875mln in new debt to give the market more time to digest the deal.  BOE paper rallied in the secondary showing signs that there is demand for more Chicago paper 30-day supply is unchanged this morning with $5.6bn on tap over the next 30 days versus $6.8bn on Monday.

PR trading remains extremely light as we head into the Friday meeting between the commonwealth and creditors.   Benchmark 8’s rallied with bonds trading @ $71.50 (11.93%) on Wednesday after trading around $70 earlier in the week. 

30-Day visible supply: $5.6bn


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