Thursday, February 25, 2016

Corporate Bond Market
Firm tone to global markets this morning with oil up around $32.   European stocks are all up, trading +1.5-2.5% and US Equity futures also up with the DJIA Futures +26 and S&P Futures +2.75.   US Treasuries are rallying, pushing the yield on the 10yr down to a 1.731% last.  Credit is opening unchanged to slightly better.  The Investment Grade Index is unchanged at 114/115.  Cash spreads are better after a choppy session yesterday.

Primary markets were quiet yesterday but we are expecting a few deals today.  There are rumors of a few industrial deals on tap but no names announced yet.  WTD we are at $28bn,  MTD $65bn out of an estimated $90bn. 

In economic news, Initial Jobless Claims (8:30am), Durable Goods Orders (8:30am), and Bloomberg Consumer Comfort (9:45am) are due to be released today.


Municipal Bond Market
Munis are stronger this morning after a mixed trading day yesterday.  We saw aggressive trades to start the day, however, the bid side quickly faded in afternoon trading as munis followed Treasuries lower.  A slate of new deals that priced earlier in the week saw weaker bids once they freed up in the secondary.  New issue has been the highlight of the market recently.  However, the lack of liquidity is starting to catch up.  We are starting to see less demand for new deals with dealers concerned about moving line items.  30-day supply is weaker this morning with $5.7bn scheduled over the next 30 days versus $7bn Wednesday.

PR trading remains light with very few trades across all series of debt.  We continue to see little demand for both insured and non insured paper.  For the first time in months, BWs have been scarce with very few sellers or buyers of the name at these levels.

30-Day visible supply: $5.7bn