Wednesday, November 2, 2016

Corporate Bond Market

US Equity Futures are down to start the day with the DJ Futures -22 and the S&P Futures -1. The global tone is weak through the overnight as equities traded lower in Europe and mixed in Asia. Oil is weaker, last at $45.96/ barrel and rates are stronger with the 10yr Treasury last at 1.787%. Credit is tighter with the Invest Grade Index showing 71.7/72.4 and cash is also stronger.

In credit news, Tuesday’s primary market saw $2.65bn priced in Investment Grade Credit bringing the weekly tally to $6.975bn. It was a fair day in High Yield space with issuance with 7 deals priced for just under $3.5bn. The consensus for November is $87bn in Investment Grade Credit. Today is expected to be a light day in new issuance ahead of the FOMC’s Rate Decision.

In economic data, there are a few key announcements on the calendar for today. First, Mortgage Applications fell 1.2% last week. October’s ADP Employment Change reported that US Companies added 147k employees surrendering the lowest amount of new hires in 5 months. This afternoon, the Fed will be announcing their rate decision. Based on the uncertainty surrounding the presidential election and unfavorable jobs report, the rate hike may be put off until December. Stay tuned.