Tuesday, October 25, 2016

Corporate Bond Market

US Equity Futures are up to start the day with the DJ Futures +16 and the S&P Futures +2. International equity markets are mixed through the overnight. Oil is up, last at $50.77/ barrel and rates are weaker with the 10yr Treasury last at 1.779%. Credit is wider with the Invest Grade Index showing 66.5/67.2 and cash is also weaker.

In credit news, Monday’s primary market saw $10.1bn priced in Investment Grade Credit. This week is expected to bring $20-30bn in Investment Grade and $3bn in High Yield paper. Goldman Sachs is on the calendar to bring a benchmark 11NC10 floating rate note today.

In economic data, there are a few key announcements to look out for. First, August’s FHFA House Price Index grew to 0.7%. Following, October’s Consumer Confidence Index and Richmond’s Fed Manufacturing Index will be announced today.

Municipal Bond Market

Munis are unchanged this morning after a mixed trading day to start the week.  We are starting to see buyers return to the market place to fill inquiries, however, the bid side on BW remains weaker than ever.  It seems as if most deals are hesitant to position bonds here are filling inquiries with street offerings.  We expect to see new issuance dominate the market today as we begin to see the pricing of $16bln in new debt.  Supply is stronger this morning with $21bln on tap over the next 30 days versus $20bln on Monday.

PR trading was light on Monday with the market mostly focused on GO debt.  Volume in GOs was extremely light before the lawsuit and we have seen buyers step back into the credit.   PR 8’s continue to drift higher with bonds offered around $68F this morning.

30 Day visible supply: 21bln

Final MMD Read

Monday, October 24, 2016 15:00

Final MMD read (5% coupon)



          tsy 10yr 1.765%